Social Security Numbers
Ensuring the Integrity of the SSN Gao ID: GAO-03-941T July 10, 2003In 1936, the Social Security Administration (SSA) established the Social Security Number (SSN) to track worker's earnings for social security benefit purposes. However, the SSN is also used for a myriad of non-Social Security purposes. Today, the SSN is used, in part, as a verification tool for services such as child support collection, law enforcement enhancements, and issuing credit to individuals. Although these uses of SSNs are beneficial to the public, SSNs are also a key piece of information in creating false identities. Moreover, the aggregation of personal information, such as SSNs, in large corporate databases, as well as the public display of SSNs in various public records, may provide criminals the opportunity to commit identity crimes. SSA, the originator of the SSN, is responsible for ensuring SSN integrity and verifying the authenticity of identification documents used to obtain SSNs. Although Congress has passed a number of laws to protect an individual's privacy, the continued use and reliance on SSNs by private and public sector entities and the potential for misuse underscores the importance of identifying areas that can be strengthened. Accordingly, this testimony focuses on describing (1) public and private sector use and display of SSNs, and (2) SSA's role in preventing the proliferation of false identities.
Public and some private sector entities rely extensively on SSNs. We reported last year that federal, state and county government agencies rely on the SSN to manage records, verify eligibility of benefit applicants, and collect outstanding debt. SSNs are also displayed on a number of public record documents that are routinely made available to the public. To improve customer service, some state and local government entities are considering placing more public records on the Internet. In addition, some private sector entities have come to rely on the SSN as an identifier, using it and other information to accumulate information about individuals. This is particularly true of entities that amass public and private data, including SSNs, for resale. Certain laws have helped to restrict the use of SSN and other information by these private sector entities to specific purposes. However, as a result of the increased use and availability of SSN information and other data, more and more personal information is being centralized into various corporate and public databases. Because SSNs are often the identifier of choice among individuals seeking to create false identities, to the extent that personal information is aggregated in public and private sector databases it becomes vulnerable to misuse. As the agency responsible for issuing SSNs and maintaining the earnings records for millions of SSN holders, SSA plays a unique role in helping to prevent the proliferation of false identities. Following the events of September 11, 2001, SSA formed a task force to address weaknesses in the enumeration process and developed major new initiatives to prevent the inappropriate assignment of SSNs to non-citizens, who represent the bulk of new SSNs issued by SSA's 1,333 field offices. SSA now requires field staff to verify the identity information and immigration status of all non-citizen applicants with the Department of Homeland Security (DHS), prior to issuing an SSN. However, other areas remain vulnerable and could be targeted by those seeking fraudulent SSNs. These include SSA's process for assigning social security numbers for children under age one and issuing replacement social security cards. SSA also provides a service to states to verify the SSNs of driver license applicants. Fewer than half the states have used SSA's service and the extent to which they regularly use it varies. Factors such as cost, problems with system reliability, and state priorities and policies affect states' use SSA's service. We also identified a weakness in SSA's verification service that exposes some states to fraud by those using the SSNs of deceased persons.
GAO-03-941T, Social Security Numbers: Ensuring the Integrity of the SSN
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Testimony:
Before the Subcommittee on Social Security, Committee on Ways and Means
House of Representatives:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 1:00 p.m. EST:
Thursday, July 10, 2003:
Social Security Numbers:
Ensuring the Integrity of the SSN:
Statement of Barbara D. Bovbjerg, Director, Education, Workforce, and
Income Security Issues:
GAO-03-941T:
GAO Highlights:
Highlights of GAO-03-941T, a report to the Subcommittee on Social
Security, Committee on Ways and Means, House of Representatives
Why GAO Did This Study:
In 1936, the Social Security Administration (SSA) established the
Social Security Number (SSN) to track worker‘s earnings for social
security benefit purposes. However, the SSN is also used for a myriad
of non- SSN purposes. Today, the SSN is used, in part, as a
verification tool for services such as child support collection, law
enforcement enhancements, and issuing credit to individuals. Although
these uses of SSNs are beneficial to the public, SSNs are also a key
piece of information in creating false identities. Moreover, the
aggregation of personal information, such as SSNs, in large corporate
databases, as well as the public display of SSNs in various public
records, has provided criminals the opportunity to commit identity
crimes. SSA, the originator of the SSN, is responsible for ensuring
SSN integrity and verifying the authenticity of identification
documents used to obtain SSNs.
Although Congress has passed a number of laws to protect an
individual‘s privacy, the continued use and reliance on SSNs by
private and public sector entities and the potential for misuse
underscores the importance of identifying areas that can be
strengthened. Accordingly, this testimony focuses on describing (1)
public and private sector use and display of SSNs, and (2) SSA‘s role
in preventing the proliferation of false identities.
What GAO Found:
Public and some private sector entities rely extensively on SSNs. We
reported last year that federal, state and county government agencies
rely on the SSN to manage records, verify eligibility of benefit
applicants, and collect outstanding debt. SSNs are also displayed on a
number of public record documents that are routinely made available to
the public. To improve customer service, some state and local
government entities are considering placing more public records on the
Internet. In addition, some private sector entities have come to rely
on the SSN as an identifier, using it and other information to
accumulate information about individuals. This is particularly true of
entities that amass public and private data, including SSNs, for
resale. Certain laws have helped to restrict the use of SSN and other
information by these private sector entities to specific purposes.
However, as a result of the increased use and availability of SSN
information and other data, more and more personal information is
being centralized into various corporate and public databases. Because
SSNs are often the identifier of choice among individuals seeking to
create false identities, to the extent that personal information is
aggregated in public and private sector databases it becomes
vulnerable to misuse.
As the agency responsible for issuing SSNs and maintaining the
earnings records for millions of SSN holders, SSA plays a unique role
in helping to prevent the proliferation of false identities. Following
the events of September 11, SSA formed a task force to address
weaknesses in the enumeration process and developed major new
initiatives to prevent the inappropriate assignment of SSNs to non-
citizens, who represent the bulk of new SSNs issued by SSA‘s 1,300
field offices. SSA now requires field staff to verify the identity
information and immigration status of all non-citizen applicants with
the Department of Homeland Security (DHS), prior to issuing an SSN.
However, other areas remain vulnerable and could be targeted by those
seeking fraudulent SSNs. These include SSA‘s process for assigning
social security numbers for children under age one and issuing
replacement social security cards. SSA also provides a service to
states to verify the SSNs of driver license applicants. Fewer than
half the states have used SSA‘s service and the extent to which they
regularly use it varies. Factors such as cost, problems with system
reliability, and state priorities and policies affect states use SSA‘s
service. We also identified a weakness in SSA‘s verification service
that exposes some states to fraud by those using the SSNs of deceased
persons.
www.gao.gov/cgi-bin/getrpt?GAO-03-941T.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact Barbara Bovbjerg at
(202) 512-7215 or bovbjergb@gao.gov.
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss ways to better protect Social
Security Numbers (SSNs) to help prevent the proliferation of false
identities whether for financial misuse or for assuming an individual's
identity. Although the Social Security Administration (SSA) originally
created SSNs as a means to track worker's earnings and eligibility for
Social Security benefits, over time the SSN has come to be used for a
myriad of purposes. As you know, SSNs are a key piece of information in
creating false identities. Allegations of SSN misuse include, for
example, incidents where a criminal uses the SSN of another individual
for the purpose of fraudulently obtaining credit, acquiring goods,
violating immigration laws, or fleeing the criminal justice system.
Although Congress has passed a number of laws to protect the security
of personal information, the continued use of and reliance on SSNs by
private and public sector entities and the potential for misuse
underscores the importance of identifying areas that can be further
strengthened. Accordingly, you asked us to talk about the uses of SSNs
and ways that the integrity of the SSN may be preserved. My remarks
today will focus on describing (1) public and private sector use and
display of SSNs, and (2) SSA's role in preventing the proliferation of
false identities. My testimony is based on a report we did for this
subcommittee on government uses of the SSN,[Footnote 1] ongoing work
that focuses on private sector SSN uses, and work we are completing on
SSA's enumeration process and the agency's verification of SSNs for
state driver licensing.
In summary, public and some private sector entities rely extensively on
SSNs. We reported last year that federal, state and county government
agencies rely extensively on the SSN to manage records, verify
eligibility of benefit applicants, collect outstanding debt, and
conduct research and program evaluations. SSNs are also displayed on a
number of public record documents that are routinely made available to
the public. To improve customer service, some state and local
government entities are considering placing more public records on the
Internet. In addition, some private sector entities have come to rely
on the SSN as an identifier, using it and other information to
accumulate information about individuals. This is particularly true of
entities that amass public and private data, including SSNs, for
resale. Certain laws have helped to restrict the use of SSN and other
information by these private sector entities to specific purposes.
However, as a result of the increased use and availability of SSN
information and other data, more and more personal information is being
centralized into various corporate and public databases. Because SSNs
are often the identifier of choice among individuals seeking to create
false identities, to the extent that personal information is aggregated
in public and private sector databases it becomes vulnerable to misuse.
As the agency responsible for issuing SSNs and maintaining the earnings
records and other personal information for millions of SSN holders, SSA
plays a unique role in helping to prevent the proliferation of false
identities. Following the events of September 11, 2001, SSA formed a
task force to address weaknesses in the enumeration process and
developed major new initiatives to prevent the inappropriate assignment
of SSNs to non-citizens, who represent the bulk of new SSNs issued by
SSA's 1,300 field offices. For example, SSA now requires field staff to
independently verify the identity information and immigration status of
all non-citizen applicants with the Department of Homeland Security
(DHS), prior to issuing an SSN. However, many SSA field staff are
relying exclusively on the DHS verification system, while neglecting
other standard practices for visually inspecting documents. SSA's
automated system for assigning SSNs also does not prevent the issuance
of an SSN if staff by-pass required verification steps. Other areas
remain vulnerable and could be targeted by those seeking fraudulent
SSNs. These include SSA's process for assigning social security numbers
for children under age one and issuing replacement social security
cards. In addition to its enumeration process, SSA provides a service
to states to verify the SSNs of individuals seeking driver's licenses.
We found that fewer than half the states have used SSA's service and
the extent to which they regularly use the service varies widely across
states. Factors such as cost, problems with system reliability, and
state priorities and policies determine whether or not states use SSA's
service. We also identified a weakness in SSA's verification service
that exposes some states to fraud by those who would use the SSN of a
deceased individual.
Background:
The Social Security Act of 1935 authorized the Social Security
Administration to establish a recordkeeping system to help manage the
Social Security program, and resulted in the creation of the SSN.
Through a process known as "enumeration," unique numbers are created
for every person as a work and retirement benefit record for the Social
Security program. Today, SSNs are generally issued to most U.S.
citizens and are also available to, non-citizens lawfully admitted to
the U.S. with permission to work. Lawfully admitted non-citizens may
also qualify for a SSN for nonwork purposes when a federal, state, or
local law requires an SSN to obtain a particular welfare benefit or
service. SSA is required to verify information from such applicants
regarding their age, identity, foreign citizenship, and immigration
status. Most of the agency's enumeration workload involves U.S.
citizens who generally receive SSNs via SSA's birth registration
process handled by hospitals. However, individuals seeking SSNs can
also apply in-person at any of SSA's field locations, through the mail,
or via the Internet.
The uniqueness and broad applicability of the SSN have made it the
identifier of choice for government agencies and private businesses,
both for compliance with federal requirements and for the agencies' and
businesses' own purposes. In addition, the boom in computer technology
over the past decades has prompted private businesses and government
agencies to rely on SSNs as a way to accumulate and identify
information for their databases. As such, SSNs are often the identifier
of choice among individuals seeking to create false identities. Law
enforcement officials and others consider the proliferation of false
identities to be one of the fastest growing crimes today. In 2002, the
Federal Trade Commission received 380,103 consumer fraud and identity
theft complaints, up from 139,007 in 2000.[Footnote 2] In 2002,
consumers also reported losses from fraud of more than $343 million. In
addition, identity crime accounts for over 80 percent of social
security number misuse allegations according to the SSA.
Public and Private Sector Uses and Display of SSNs:
As we reported to you last year, federal, state, and county government
agencies use SSNs.[Footnote 3] When these entities administer programs
that deliver services and benefits to the public, they rely extensively
on the SSNs of those receiving the benefits and services. Because SSNs
are unique identifiers and do not change, the numbers provide a
convenient and efficient means of managing records. They are also
particularly useful for data sharing and data matching because agencies
can use them to check or compare their information quickly and
accurately with that from other agencies. In so doing, these agencies
can better ensure that they pay benefits or provide services only to
eligible individuals and can more readily recover delinquent debts
individuals may owe. In addition to using SSNs to deliver services or
benefits, agencies also use or share SSNs to conduct statistical
research and program evaluations. Moreover, most of the government
departments or agencies we surveyed use SSNs to varying extents to
perform some of their responsibilities as employers, such as paying
their employees and providing health and other insurance benefits.
Many of the government agencies we surveyed in our work last year
reported maintaining public records that contain SSNs. This is
particularly true at the state and county level where certain offices
such as state professional licensing agencies and county recorders'
offices have traditionally been repositories for public records that
may contain SSNs. These records chronicle the various life events and
other activities of individuals as they interact with the government,
such as birth certificates, professional licenses, and property title
transfers. Generally, state law governs whether and under what
circumstances these records are made available to the public, and they
vary from state to state. They may be made available for a number of
reasons, including the presumption that citizens need key information
to ensure that government is accountable to the people. Certain records
maintained by federal, state, and county courts are also routinely made
available to the public. In principle, these records are open to aid in
preserving the integrity of the judicial process and to enhance public
trust and confidence in the judicial process. At the federal level,
access to documents generally has its grounding in common law and
constitutional principles. In some cases, public access is also
required by statute, as is the case for papers filed in a bankruptcy
proceeding. As with federal courts, requirements regarding access to
state and local court records may have a state common law or
constitutional basis or may be based on state laws.
Although public records have traditionally been housed in government
offices and court buildings, to improve customer service, some state
and local government entities are considering placing more public
records on the Internet. Because such actions would create new
opportunities for gathering SSNs from public records on a broad scale,
we are beginning work for this subcommittee to examine the extent to
which SSNs in public records are already accessible via the Internet.
In our current work, we found that some private sector entities also
rely extensively on the SSN. Businesses often request an individual's
SSN in exchange for goods or services. For example, some businesses use
the SSN as a key identifier to assess credit risk, track patient care
among multiple providers, locate bankruptcy assets, and provide
background checks on new employees. In some cases, businesses require
individuals to submit their SSNs to comply with federal laws such as
the tax code. Currently, there is no law that prohibits businesses from
requiring a person's SSN as a condition of providing goods and
services. If an individual refuses to give his or her SSN to a company
or organization, they can be refused goods and services unless the SSN
is provided.
To build on previous work we did to determine certain private sector
entities use of SSNs, we have focused our initial private sector work
on information resellers and consumer reporting agencies
(CRAs).[Footnote 4] Some of these entities have come to rely on the SSN
as an identifier to accumulate information about individuals, which
helps them determine the identity of an individual for purposes such as
employment screening, credit information, and criminal histories. This
is particularly true of entities, known as information resellers, who
amass personal information, including SSNs. Information resellers often
compile information from various public and private sources.[Footnote
5] These entities provide their products and services to a variety of
customers, although the larger ones generally limit their services to
customers that establish accounts with them, such as entities like law
firms and financial institutions. Other information resellers often
make their information available through the Internet to persons paying
a fee to access it.
CRAs are also large private sector users of SSNs. These entities often
rely on SSNs, as well as individuals' names and addresses to build and
maintain credit histories. Businesses routinely report consumers'
financial transactions, such as charges, loans, and credit repayments
to CRAs. CRAs use SSNs to determine consumers' identities and ensure
that incoming consumer account data is matched correctly with
information already on file.
Certain laws such as the Fair Credit Reporting Act, the Gramm-Leach-
Bliley Act, and the Driver's Privacy Protection Act have helped to
limit the use of personal information, including SSNs, by information
resellers and CRAs. These laws limit the disclosure of information by
these entities to specific circumstances. In our discussion with some
of the larger information resellers and CRAs, we were told that they
have take specific actions to adhere to these laws, such as
establishing contracts with their clients specifying that the
information they obtain will be used only for accepted purposes under
the law.
The extensive public and private sector uses of SSNs and availability
of public records and other information, especially via the Internet,
has allowed individuals' personal information to be aggregated into
multiple databases or centralized locations. In the course of our work,
we have identified numerous examples where public and private databases
have been compromised and personal data, including SSNs, has been
stolen. In some instances, the display of SSNs in public records and
easily accessible websites provided the opportunity for identity
thieves. In other instances, databases not readily available to
outsiders have had their security breached by employees with access to
key information. For example, in our current work, we identified a case
where two individuals obtained the names and SSNs of 325 high-ranking
United States military officers from a public Website, then used those
names and identities to apply for instant credit at a leading computer
company. Although criminals have not accessed all public and private
databases, such cases illustrate that these databases are vulnerable to
criminal misuse.
SSA Has a Role in Preventing SSNs from Being Used to Create False
Identities but Some Areas Remain Vulnerable:
Because SSA is the issuer and custodian of SSN data, SSA has a unique
role in helping to prevent the proliferation of false identities.
Following the events of September 11, 2001, SSA began taking steps to
increase management attention on enumeration and formed a task force to
address weaknesses in the enumeration process. As a result of this
effort, SSA has developed major new initiatives to prevent the
inappropriate assignment of SSNs to non-citizens. However, our
preliminary findings to date identified that some key weaknesses
remain. Vulnerabilities include SSA's process for issuing replacement
Social Security cards and assigning SSNs to children under age one. SSA
is also increasingly called upon by states to verify the identity of
individuals seeking driver licenses. We found that fewer than half the
states have used SSA's service and the extent to which they regularly
use the service varies widely. Factors such as costs, problems with
system reliability, and state priorities have affected states use of
SSA's verification service. We also identified a key weakness in the
service that exposes some states to inadvertently issuing licenses to
individuals using the SSNs of deceased individuals. We plan to issue
reports on these issues in September that will likely contain
recommendations to improve SSA's enumeration process and its SSN
verification service.
SSA's Enumeration Process Helps Prevent the Proliferation of False
Identities, but Additional Actions are Needed to Safeguard the Issuance
of SSNs:
SSA has increased document verifications and developed new initiatives
to prevent the inappropriate assignment of Social Security numbers
(SSNs) to non-citizens who represent the bulk of all initial SSNs
issued by SSA's 1,300 field offices. However, in some key areas,
weaknesses remain. SSA has increased document verifications by
requiring independent verification of the documents and immigration
status of all non-citizen applicants with the issuing agency--namely
the Department Homeland Security (DHS) and Department of State (State
Department) prior to issuing the SSN. However, in our audit work, we
found that many field offices are relying heavily on DHS's verification
service, while neglecting standard, in-house practices for visually
inspecting and verifying identity documents. We also found that while
SSA has made improvements to its automated system for assigning SSNs,
the system is not designed to prevent the issuance of an SSN if field
staff by-pass essential verification steps. SSA also has begun
requiring foreign students to show proof of their full-time enrollment,
but does not require field staff to verify with the school the
students' enrollment or their authorization to work. Consequently, SSNs
for non-citizen students may still be improperly issued.
SSA has also undertaken other new initiatives to shift the burden of
processing non-citizen applications from its field offices. SSA
recently piloted a specialized center in Brooklyn, New York, which
focuses exclusively on enumeration and utilizes the expertise of DHS
document examiners and SSA's OIG investigators. However, the future of
this pilot project and DHS' participation has not yet been determined.
Meanwhile, in late 2002, SSA began a phased implementation of a long-
term process to issue SSNs to non-citizens at the point of entry into
the United States, called "Enumeration at Entry" (EAE). EAE offers the
advantage of using State Department and DHS expertise to authenticate
information provided by applicants for subsequent transmission to SSA
who then issues the SSN. Currently, EAE is limited to immigrants age 18
and older who have the option of applying for an SSN at one of the 127
State posts worldwide that issue immigrant visas. SSA has experienced
problems with obtaining clean records from both the State Department
and DHS, but plans to continue expanding the program over time to
include other non-citizen groups, such as students and temporary
visitors. The agency also intends to evaluate the initial phase of EAE
in conjunction with the State Department and DHS. However, this
evaluation has not yet been planned or scheduled.
While SSA has embarked on these new initiatives, it has not tightened
controls in two key areas of its enumeration process that could be
exploited by individuals seeking fraudulent SSNs. One area is the
assignment of SSNs to children under age one. Prior work by SSA's
Inspector General identified the assignment of SSNs to children as an
area prone to fraud because SSA did not independently verify the
authenticity of various state birth certificates. Despite the training
and guidance provided to field office employees, the OIG found that the
quality of many counterfeit documents was often too good to detect
simply by visual inspection. Last year, SSA revised its policies to
require that field staff obtain independent third party verification of
the birth records for U.S.-born individuals age one and older from the
state or local bureau of vital statistics prior to issuing an SSN card.
[Footnote 6] However, SSA left in place its policy for children under
age one and continues to require only a visual inspection of documents,
such as birth records.
SSA's policies relating to enumerating children under age one expose
the agency to fraud. During our fieldwork, we found an example of a
non-citizen who submitted a counterfeit birth certificate in support of
an SSN application for a fictitious U.S. born child under age one. In
this case, the SSA field office employee identified the counterfeit
state birth certificate by comparing it with an authentic one. However,
SSA staff acknowledged that if a counterfeit out-of-state birth
certificate had been used, SSA would likely have issued the SSN because
of staff unfamiliarity with the specific features of the numerous state
birth certificates. Further, we were able to prove the ease with which
individuals can obtain SSNs by exploiting SSA's current processes.
Working in an undercover capacity our investigators were able to obtain
two SSNs. By posing as parents of newborns, they obtained the first SSN
by applying in-person at a SSA field office using a counterfeit birth
certificate and baptismal certificate. Using similar documents, a
second SSN was obtained by our investigators who submitted all material
via the mail. In both cases, SSA staff verified our counterfeit
documents as being valid. SSA officials told us that they are re-
evaluating their policy for enumerating children under age one.
However, they noted that parents often need an SSN for their child soon
after birth for various reasons such as for income tax purposes. They
acknowledge that a challenge facing the agency is to strike a better
balance between serving the needs of the public and ensuring SSN
integrity.
In addition to the assignment of SSNs to children under the age of one,
SSA's policy for replacing Social Security cards also increases the
potential for misuse of SSNs. SSA does not limit the number of
replacement cards individuals can receive. Of the 18 million cards
issued by SSA in FY2002, 12.4 million, or 69 percent, were replacement
cards. More than 1 million of these cards were issued to non-citizens.
In several of the field offices we visited, replacement cards
represented 70 percent of the total enumeration workload. While SSA
requires non-citizens applying for a replacement card to provide the
same identity and immigration information as if they were applying for
an original SSN, SSA's evidence requirements for citizens are much less
stringent. Citizens applying for a replacement card need not prove
their citizenship; they may use as proof of identity such documents as
a driver's license, passport, employee identification card, school
identification card, church membership or confirmation record, life
insurance policy, or health insurance card. The ability to obtain
numerous replacement SSN cards with less documentation creates a
condition for requestors to obtain SSNs for a wide range of illicit
uses including selling them to non-citizens. These cards can be sold to
individuals seeking to hide or create a new identity, perhaps for the
purpose of some illicit activity. SSA told us the agency is considering
limiting the number of replacement cards with certain exceptions such
as for name changes, administrative errors, and hardships. However,
they cautioned that while support exists for this change within the
agency, some advocacy groups oppose such a limit.
Field staff we interviewed told us that despite their reservations
regarding individuals seeking excessive numbers of replacement cards,
they were required under SSA policy to issue the cards. Many of the
field office staff and managers we spoke to acknowledged that the
current policy weakens the integrity of SSA's enumeration process.
SSA's Verification of Driver Licenses Applicants Helps Prevent
Fraudulent Documents, but Vulnerabilities Still Exist:
The events of September 11th, 2001 focused attention on the importance
of identifying people who use false identity information or documents,
particularly in the driver licensing process. Driver licenses are a
widely accepted form of identification that individuals frequently use
to obtain services or benefits from federal and state agencies, open a
bank account, request credit, board an airplane, and carry on other
important activities of daily living. For this reason, driver licensing
agencies are points at which individuals may attempt to fraudulently
obtain a license using a false name, social security number (SSN), or
other documents such as birth certificates to secure this key
credential.
Given that most states collect SSNs during the licensing process, SSA
is uniquely positioned to help states verify the identity information
provided by applicants. To this end, SSA has a verification service in
place that allows state driver licensing agencies to verify the SSN,
name, and date of birth of customers with SSA's master file of SSN
owners. States can transmit requests for SSN verification in two ways.
One is by sending multiple requests together, called the "batch"
method, to which SSA reports it generally responds within 48 hours. The
other way is to send an individual request on-line, to which SSA
responds immediately.
Twenty-five states have used the batch or on-line method to verify SSNs
with SSA and the extent to which they use the service on a regular
basis varies. About three-fourths of the states that rely on SSA's
verification service used the on-line method or a combination of the
on-line and batch method, while the remaining states used the batch
method exclusively. Over the last several years, batch states estimated
submitting over 84 million batch requests to SSA compared to 13 million
requests submitted by on-line users. States' use of SSA's on-line
service has increased steadily over the last several years. However,
the extent of use has varied significantly, with 5 states submitting
over 70 percent of all on-line verification requests and one state
submitting about one-third of the total.
Various factors, such as costs, problems with system reliability, and
state priorities affect states' decisions regarding use of SSA's
verification service. In addition to the per-transaction fees that SSA
charges, states may incur additional costs to set up and use SSA's
service, including the cost for computer programming, equipment,
staffing, training, and so forth. Moreover, states' decisions about
whether to use SSA's service, or the extent to which to use it, are
also driven by internal policies, priorities, and other concerns. For
example, some of the states we visited have policies requiring their
driving licensing agencies to verify all customers' SSNs. Other states
may limit their use of the on-line method to certain targeted
populations, such as where fraud is suspected or for initial licenses,
but not for renewals of in-state licenses. The non-verifying states we
contacted expressed reluctance to use SSA's verification service based
on performance problems they had heard were encountered by other
states. Some states cited concerns about frequent outages and slowness
of the on-line system. Other states mentioned that the extra time to
verify and resolve SSN problems could increase customer waiting times
because a driver license would not be issued until verification was
complete.
Indeed, weaknesses in SSA's design and management of its SSN on-line
verification services have limited its usefulness and contributed to
capacity and performance problems. SSA used an available infrastructure
to set up the system and encountered capacity problems that continued
and worsened after the pilot phase. The capacity problems inherent in
the design of the on-line system have affected state use of SSA's
verification service. Officials in one state told us that they have
been forced to scale back their use of the system because they were
told by SSA that their volume of transactions were overloading the
system. In addition, because of issues related to performance and
reliability, no new states have used the service since the summer of
2002. At the time of our review, 10 states had signed agreements with
SSA and were waiting to use the on-line system and 17 states had
received funds from Department of Transportation for the purpose of
verifying SSNs with SSA. It is uncertain how many of the 17 states will
ultimately opt to use SSA's on-line service. However, even if they
signed agreements with SSA today, they may not be able to use the
service until the backlog of waiting states is addressed. More
recently, SSA has made some necessary improvements to increase system
capacity and to refocus its attention to the day-to-day management of
the service. However, at the time of our review, the agency still has
not established goals for the level of service it will provide to
driver licensing agencies.
In reviewing SSA's verification service, we identified a key weakness
that expose some states to issuing licenses to applicants using the
personal information of deceased individuals. Unlike the on-line
service, SSA does not match batch requests against its nationwide death
records. As a result, the batch method will not identify and prevent
the issuance of a license in cases where an SSN name and date of birth
of a deceased individual is being used. SSA officials told us that they
initially developed the batch method several years ago and they did not
design the system to match SSNs against its death files. However, in
developing the on-line system for state driver licensing agencies, a
death match was built into the new process. At the time of our review,
SSA acknowledged that it had not explicitly informed states about the
limitation of the batch service.
Our own analysis of one month of SSN transactions submitted to SSA by
one state using the batch method identified at least 44 cases in which
individuals used the SSN, name, and date of birth of persons listed as
deceased in SSA's records to obtain a license or an identification
card.[Footnote 7] We forwarded this information to state investigators
who quickly confirmed that licenses and identification cards had been
issued in 41 cases and were continuing to investigate the others. To
further assess states' vulnerability in this area, our own
investigators working in an undercover capacity were able to obtain
licenses in two batch states using a counterfeit out-of-state license
and other fraudulent documents and the SSNs of deceased persons. In
both states, driver licensing employees accepted the documents we
submitted as valid. Our investigators completed the transaction in one
state and left with a new valid license.[Footnote 8] In the second
state, the new permanent license arrived by mail within weeks. The ease
in which they were able to obtain these licenses confirmed the
vulnerability of states currently using the batch method as a means of
SSN verification. Moreover, states that have used the batch method in
prior years to clean up their records and verify the SSNs of millions
of driver license holders, may have also unwittingly left themselves
open to identity theft and fraud.
Conclusions:
The use of SSNs by both public and sector entities is likely to
continue given that it is used as the key identifier by most of these
entities and there is currently no other widely accepted alternative.
To help control such use, certain laws have helped to safeguard such
personal information, including SSNs, by limiting disclosure of such
information to specific purposes. To the extent that personal
information is aggregated in public and private sector databases, it
becomes vulnerable to misuse. In addition, to the extent that public
record information becomes more available in an electronic format, it
becomes more vulnerable to misuse. The ease of access the Internet
affords could encourage individuals to engage in information gathering
from public records on a broader scale than they could before when they
had to visit a physical location and request or search for information
on a case-by-case basis.
SSA has made substantial progress in protecting the integrity of the
SSN by requiring that the immigration and work status of every non-
citizen applicant be verified before an SSN is issued. However, without
further system improvements and assurance that field offices will
comply fully with the new policies and procedures this effort may be
less effective than it could be. Further, as SSA closes off many
avenues of unauthorized access to SSNs, perpetrators of fraud will
likely shift their strategies to less protected areas. In particular,
SSA's policies for enumerating children and providing unlimited numbers
of replacement cards may well invite such activity, unless they too are
modified.
State driver license agencies face a daunting task in ensuring that the
identity information of those to whom they issues licenses is verified.
States effectiveness verifying individual's identities is often
dependent on several factors, including the receipt of timely and
accurate identity information from SSA. Unfortunately, design and
management weaknesses associated with SSA's verification service have
limited its effectiveness. States that are unable to take full
advantage of the service and others that are waiting for the
opportunity to use it remain vulnerable to identity crimes. In
addition, states that continue to rely primarily or partly on SSA's
batch verification service still risk issuing licenses to individuals
using the SSNs and other identity information of deceased individuals.
This remains a critical flaw in SSA's service and states' efforts to
strengthen the integrity of the driver license.
GAO is preparing to publish reports covering the work I have summarized
within the next several months, which will include recommendations
aimed at ensuring the integrity of the SSN. We look forward to
continuing to work with this Subcommittee on these important issues. I
would be happy to respond to any questions you or other members of the
Subcommittee may have.
Contacts and Acknowledgments For further information regarding this
testimony, please contact Barbara D. Bovbjerg, Director, or Dan
Bertoni, Assistant Director, Education, Workforce, and Income Security
at (202) 512-7215. Individuals making key contributions to this
testimony include Mindy Bowman, Alicia Cackley, Tamara Cross, Patrick
DiBattista, Melissa Hinton, Jason Holsclaw, George Scott, Jacquelyn
Stewart, and Tony Wysocki.
FOOTNOTES
[1] U.S. General Accounting Office, Social Security Numbers: Government
Benefits from SSN Use but Could Provide Better Safeguards, GAO-02-352
(Washington D.C.: May 31, 2002).
[2] Identity theft records broken out of consumer fraud totaled per
year: 31,117(2000), 86,198(2001), and 161,819(2002).
[3] U.S. General Accounting Office, Social Security Numbers: Government
Benefits from SSN Use but Could Provide Better Safeguards, GAO-02-352
(Washington D.C.: May 2002).
[4] U.S. General Accounting Office, Social Security: Government and
Commercial Use of the Social Security Number is Widespread, GAO/
HEHS-99-28 (Washington, D.C.: Feb. 16, 1999.)
[5] The information compiled may include public records of bankruptcy,
tax liens, civil judgments, criminal histories, deaths, real estate
ownership, driving histories, voter registration, and professional
licenses. Private data sources include information from telephone
directories and copyrighted publications.
[6] Most U.S.-born individuals receive a SSN through a process SSA
refers to as Enumeration-at-Birth (EAB). Under EAE parents can apply
for a SSN for their newborn child at the hospital as part of the birth
registration process. Under this process hospitals send birth
registration information to a state or local bureau of vital statistics
where it is put into a database. SSA accepts the data captured during
the birth registration process as evidence of age, identity, and
citizenship, and assigns the child an SSN without further parental
involvement. The appropriate bureau of vital statistics forwards SSA
the required information, usually by electronic means. Once SSA
receives the required information, it performs edits, assigns the SSN
and issues the card.
[7] SSA's death records may contain inaccuracies because SSA records
all reports of death but only verifies those involving benefit
payments.
[8] This state does not use SSA's batch verification process for
initial licenses, but only for license renewals. Therefore, the use of
the deceased person's SSN will not be caught by the system when the
state ultimately verifies it using the batch method.
