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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 10:00 a.m. EDT:

Tuesday, June 15, 2004:

SOCIAL SECURITY NUMBERS:

Use Is Widespread and Protections Vary:

Statement of Barbara D. Bovbjerg, Director, Education, Workforce, and 
Income Security Issues:

GAO-04-768T:

GAO Highlights:

Highlights of GAO-04-768T, a report to 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 workers’ earnings for social 
security benefit purposes. Today, private and public sector entities 
frequently ask individuals for SSNs in order to conduct their 
businesses and sometimes to comply with federal laws. Although uses of 
SSNs can be beneficial to the public, SSNs are also a key piece of 
information in creating false identities either for financial misuse or 
for assuming an individual’s identity. The retention of SSNs in the 
public and private sectors can create opportunities for identity theft. 
In addition, the aggregation of personal information, such as SSNs, in 
large corporate databases, as well as the public display of SSNs in 
various records accessed by the public, may provide criminals the 
opportunity to easily obtain this personal information. Given the 
heightened awareness of identity crimes, this testimony focuses on 
describing (1) how private sector entities obtain, use, and protect 
SSNs, and (2) public sector uses and protections of SSNs.

What GAO Found:

Private sector entities rely extensively on SSNs. We reported early 
this year that entities such as information resellers, consumer 
reporting agencies , and health care organizations routinely obtain 
SSNs from their business clients and public sources, such as government 
records that can be displayed to the public. These entities then use 
SSNs for various purposes, such as to verify individual’s identity or 
match existing records, and have come to rely on the SSN as an 
identifier, which helps then determine a person’s identity for the 
purpose of providing the services they offer. There is no single 
federal law that regulates the overall use or restricts the disclosure 
of SSNs by private sector entities. However, certain federal laws have 
helped to place restrictions on the disclosures of personal information 
private sector entities are allowed to make to their customers, and 
certain states have enacted laws to restrict the private sector’s use 
of SSNs. 

Public sector entities also extensively use SSNs. All three levels of 
government use the SSN to comply with certain federal laws and 
regulations, as well as for their own purposes. These agencies rely on 
the SSN to manage records, verify benefit eligibility, collect 
outstanding debt, and conduct research and program evaluations. Despite 
their widespread reliance on and use of SSNs, government agencies are 
taking steps to safeguard the SSN. For example, some agencies are not 
using the SSN as the primary identification number. However, given the 
open nature of certain government records, SSNs appear in records 
displayed to the public such as documents that record financial 
transactions or court documents. Current GAO work under way for this 
subcommittee is focusing on the storage, display, and protection of 
SSNs in public records. Our preliminary survey data show that the types 
of records most likely to contain SSNs and be made available to the 
general public by state government entities are court records, death 
records, Uniform Commercial Code filings, and professional licensing 
records. In addition, our preliminary data suggest that responding 
state offices reported over 35 instances where they had no specific use 
for collecting SSNs. In a previous report, we proposed that Congress 
consider developing a unified approach to safeguarding SSNs used in all 
levels of government and particularly those displayed in public 
records, and we continue to believe that this approach has merit. 

www.gao.gov/cgi-bin/getrpt?GAO-04-768T.

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.

[End of section]

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss private and public sector 
entities' use of Social Security numbers (SSNs). Although the Social 
Security Administration (SSA) originally created SSNs as a means to 
track workers' earnings and eligibility for Social Security benefits, 
over time the SSN has come to be used for a myriad of purposes; 
individuals are frequently asked to supply personal information, 
including their SSNs, to both public and private sector entities. In 
addition, individuals' SSNs can be found in a number of public sources 
such as records displayed to the public. Given the uniqueness and broad 
applicability of the SSN, many private and public sector entities rely 
extensively on the SSN sometimes as a way to accumulate and identify 
information for their databases, sometimes to comply with federal 
regulations, and other times for various business purposes. The 
potential for misuse of the SSN has raised questions about how private 
and public sector entities obtain, use, and protect SSNs.

Although Congress has passed a number of laws to protect the security 
of personal information, the continued use of and reliance on SSNs by 
both private and public sector entities underscores the importance of 
determining if appropriate safeguards are in place to protect 
individuals' private information or if enhanced protection of 
individuals' personal information is needed. Accordingly, you asked us 
to talk about how certain types of private and public sector entities 
obtain SSNs and what protections, if any, exist to govern their use. My 
remarks today will focus on describing (1) how private sector entities 
obtain, use, and protect SSNs and (2) public sector uses and 
protections.

To determine how private sector entities obtain, use, and protect SSNs, 
we relied on our previous work that looked at how private sector 
entities obtain and use SSNs and the laws that limit disclosure of this 
use.[Footnote 1] To determine how the public sector uses and protects 
SSNs, we also relied on our previous work that looked at the 
government's use and protection of SSNs.[Footnote 2] We are currently 
conducting a survey of state and local agencies to determine the extent 
to which SSNs are displayed in public records, the types of records 
they are displayed in, and how those records are maintained. In 
addition, we are conducting structured interviews of federal agencies 
concerning the display of SSNs.

In summary, entities such as information resellers, consumer reporting 
agencies (CRAs), and health care organizations routinely obtain SSNs 
from their business clients and from public sources, such as marriage 
licenses, paternity determinations, and professional licenses. 
Businesses use SSNs for various purposes, such as to build databases, 
verify individuals' identities, or match existing records.[Footnote 3] 
Given the various types of services these companies offer, we found 
that all of these entities have come to rely on the SSN as an 
identifier, which they say helps them determine a person's identity for 
the purpose of providing the services they offer. However, certain 
federal laws have helped to limit the disclosures of personal 
information these private sector entities are allowed to make to their 
customers. Private sector entities are either subject to the laws 
directly, given the nature of their business, or indirectly, through 
their business clients who are subject to these laws. Some states have 
also enacted laws to restrict the private sector's use of SSNs. 
However, such restrictions vary by state.

Public sector entities also rely extensively on SSNs. These agencies 
often obtain SSNs for compliance with federal laws and regulations and 
for their own agencies' purposes. We found that federal, state, and 
county government agencies rely extensively on the SSN to manage 
records, verify benefit eligibility, collect outstanding debt, conduct 
research and program evaluations, and verify information provided to 
state drivers' licensing agencies.[Footnote 4] Given that SSNs are 
often the identifier of choice among individuals seeking to create 
false identities, these agencies are taking steps to safeguard SSNs. 
Yet despite these actions, SSNs appear in records displayed to the 
public such as documents that record financial transactions or court 
documents. In our current work for this Subcommittee, we are looking at 
the storage, display, and protection of SSNs in public records. Our 
preliminary survey data show that the types of records mostly likely to 
contain SSNs and be made available to the general public by state 
government entities are court records, death records, Uniform 
Commercial Code (UCC) filings, and professional licensing records. In 
addition, our preliminary results show responding state offices 
reported over 35 instances where they had no specific use for 
collecting SSNs. In a previous report, we proposed that Congress 
consider developing a unified approach to safeguarding SSNs used in all 
levels of government and particularly those displayed in public 
records, and we continue to believe that this approach has 
merit.[Footnote 5]

Background:

The Social Security Act of 1935 authorized SSA to establish a record-
keeping system to help manage the Social Security program, and this 
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. SSA 
generally issues SSNs to most U.S. citizens, and SSNs are also 
available to noncitizens lawfully admitted to the United States with 
permission to work. SSA estimates that approximately 277 million 
individuals currently have SSNs. The SSN has become the identifier of 
choice for government agencies and private businesses, and thus it is 
used for a myriad of non-Social Security purposes.

The growth in the use of SSNs is important to individual SSN holders 
because these numbers, along with names and birth certificates, are 
among the three personal identifiers most often sought by identity 
thieves.[Footnote 6] In addition, SSNs are used as breeder information 
to create additional false identification documents, such as drivers' 
licenses. Recent statistics collected by federal agencies and CRAs 
indicate that the incidence of identity theft appears to be 
growing.[Footnote 7] The Federal Trade Commission (FTC), the agency 
responsible for tracking identity theft, reported that consumer fraud 
and identity theft complaints grew from 404,000 in 2002 to 516,740 in 
2003. In 2003, consumers also reported losses from fraud of more than 
$437 million, up from $343 million in 2002. In addition, identity crime 
account for over 80 percent of SSN misuse allegations according to the 
SSA. Also, officials from two of the three national CRAs report an 
increase in the number of 7-year fraud alerts placed on consumer credit 
files, which they consider to be reliable indicators of the incidence 
of identity theft.[Footnote 8] Law enforcement entities report that 
identity theft is almost always a component of other crimes, such as 
bank fraud or credit card fraud, and may be prosecuted under the 
statutes covering those crimes.

Private Sector Entities Routinely Obtain and Use SSNs, and Certain Laws 
Affect The Disclosure of This Information:

Private sector entities such as information resellers, CRAs, and health 
care organizations routinely obtain and use SSNs.[Footnote 9] Such 
entities obtain the SSNs from various public sources and their business 
clients wishing to use their services. We found that these entities 
usually use SSNs for various purposes, such as to build tools that 
verify an individual's identity or match existing records. Certain 
federal laws have limited the disclosures private sector entities are 
allowed to make to their customers, and some states have also enacted 
laws to restrict the private sector's use of SSNs.

Private Sector Entities Obtain SSNs from Public and Private Sources and 
Use SSNs for Various Purposes:

Private sector entities such as information resellers, CRAs, and health 
care organizations generally obtain SSNs from various public and 
private sources and use SSNs to help identify individuals. Of the 
various public sources available, large information resellers told us 
they obtain SSNs from various records displayed to the public such as 
records of bankruptcies, tax liens, civil judgments, criminal 
histories, deaths, real estate ownership, driving histories, voter 
registrations, and professional licenses. Large information resellers 
said that they try to obtain SSNs from public sources where possible, 
and to the extent public record information is provided on the 
Internet, they are likely to obtain it from such sources. Some of these 
officials also told us that they have people that go to courthouses or 
other repositories to obtain hard copies of public records. 
Additionally, they obtain batch files of electronic copies of all 
public records from some jurisdictions.

Given the varied nature of SSN data found in public records, some 
reseller officials said they are more likely to rely on receiving SSNs 
from their business clients than they are from obtaining SSNs from 
public records. These entities obtain SSNs from their business clients, 
who provide SSNs in order to obtain a reseller's services or products, 
such as background checks, employee screening, determining criminal 
histories, or searching for individuals. Large information resellers 
also obtain SSN information from private sources. In many cases such 
information was obtained through review of data where a customer has 
voluntarily supplied information resellers with information about 
himself or herself. In addition, large reseller officials said they 
also use their clients' records in instances where the client has 
provided them with information.

We also found that Internet-based resellers rely extensively on public 
sources and records displayed to the public. These resellers listed on 
their Web sites public information sources, such as newspapers, and 
various kinds of public record sources at the county, state, and 
national levels. During our investigation, we determined that once 
Internet-based resellers obtained an individual's SSN they relied on 
information in public records to help verify the individual's identity 
and amass information around the individual's SSN.

Like information resellers, CRAs also obtain SSNs from public and 
private sources as well as from their customers or the businesses that 
furnish data to them. CRA officials said that they obtain SSNs from 
public sources, such as bankruptcy records, a fact that is especially 
important in terms of determining that the correct individual has 
declared bankruptcy. CRA officials also told us that they obtain SSNs 
from other information resellers, especially those that specialize in 
obtaining information from public records. However, SSNs are more 
likely to be obtained from businesses that subscribe to their services, 
such as banks, insurance companies, mortgage companies, debt collection 
agencies, child support enforcement agencies, credit grantors, and 
employment screening companies. Individuals provide these businesses 
with their SSNs for reasons such as applying for credit, and these 
businesses voluntarily report consumers' charge and payment 
transactions, accompanied by SSNs, to CRAs.

We found that health care organizations were less likely to rely on 
public sources for SSN data. Health care organizations obtain SSNs from 
individuals themselves and from companies that offer health care plans. 
For example, subscribers or policyholders provide health care plans 
with their SSNs through their company or employer group when they 
enroll in health care plans. In addition to health care plans, health 
care organizations include health care providers, such as hospitals. 
Such entities often collect SSNs as part of the process of obtaining 
information on insured people. However, health care officials said 
that, particularly with hospitals, the medical record number rather 
than the SSN is the primary identifier.

Information resellers, CRAs, and health care organization officials all 
said that they use SSNs to verify an individual's identity. Most of the 
officials we spoke to said that the SSN is the single most important 
identifier available, mainly because it is truly unique to an 
individual, unlike an individual's name and address, which can often 
change over an individual's lifetime. Large information resellers said 
that they generally use the SSN as an identity verification tool. Some 
of these entities have incorporated SSNs into their information 
technology, while others have incorporated SSNs into their clients' 
databases used for identity verification. For example, one large 
information reseller that specializes in information technology 
solutions has developed a customer verification data model that aids 
financial institutions in their compliance with some federal laws 
regarding "knowing your customer." We also found that Internet-based 
information resellers use the SSN as a factor in determining an 
individual's identity. We found these types of resellers to be more 
dependent on SSNs than the large information resellers, primarily 
because their focus is more related to providing investigative or 
background-type services to anyone willing to pay a fee. Most of the 
large information resellers officials we spoke to said that although 
they obtain the SSN from their business clients, the information they 
provide back to their customers rarely contains the SSN. Almost all of 
the officials we spoke to said that they provide their clients with a 
truncated SSN, an example of which would be xxx-xx-6789.

CRAs use SSNs as the primary identifier of individuals, which enables 
them to match the information they receive from their business clients 
with the information stored in their databases on individuals.[Footnote 
10] Because these companies have various commercial, financial, and 
government agencies furnishing data to them, the SSN is the primary 
factor that ensures that incoming data is matched correctly with an 
individual's information on file. For example, CRA officials said they 
use several factors to match incoming data with existing data, such as 
name, address, and financial account information. If all of the 
incoming data, except the SSN, match with existing data, then the SSN 
will determine the correct person's credit file. Given that people 
move, get married, and open new financial accounts, these officials 
said that it is hard to distinguish among individuals. Because the SSN 
is the one piece of information that remains constant, they said that 
it is the primary identifier that they use to match data.

Health care organizations also use the SSN to help verify the identity 
of individuals. These organizations use SSNs, along with other 
information, such as name, address, and date of birth, as a factor in 
determining a member's identity. Health care officials said that health 
care plans, in particular, use the SSN as the primary identifier of an 
individual, and it often becomes the customer's insurance number. 
Health care officials said that they use SSNs for identification 
purposes, such as linking an individual's name to an SSN to determine 
if premium payments have been made. They also use the SSN as an online 
services identifier, as an alternative policy identifier, and for 
phone-in identity verification. Health care organizations also use SSNs 
to tie family members together where family coverage is used,[Footnote 
11] to coordinate member benefits, and as a cross-check for pharmacy 
transactions. Health care industry association officials also said that 
SSNs are used for claims processing, especially with regard to 
Medicare. According to these officials, under some Medicare programs, 
SSNs are how Medicare identifies benefits provided to an individual.

Certain Laws Limit the Private Sectors' Disclosure of Personal 
Information That Includes SSNs:

Certain federal and state laws have placed restrictions on certain 
private sector entities use and disclosure of consumers' personal 
information that includes SSNs. Such laws include the Fair Credit 
Reporting Act (FCRA), the Gramm-Leach-Bliley Act (GLBA), the Drivers 
Privacy Protection Act (DPPA), and the Health Insurance Portability and 
Accountability Act (HIPAA). As shown in table 1, the laws either 
restrict the disclosures that entities such as information resellers, 
CRAs, and health care organizations are allowed to make to specific 
purposes or restrict whom they are allowed to give the information to. 
Moreover, as shown in table 1, these laws focus on limiting or 
restricting access to certain personal information and are not 
specifically focused on information resellers. See appendix I for more 
information on these laws.

Table 1: Aspects of Federal Laws That Affect Private Sector Disclosure 
of Personal Information:

Federal Laws: Fair Credit Reporting Act; 
Restrictions: Limits access to credit data that includes SSNs to those 
who have a permissible purpose under the law.

Federal Laws: Gramm-Leach-Bliley Act; 
Restrictions: Creates a new definition of personal information that 
includes SSNs and limits when financial institutions may disclose the 
information to non-affiliated third parties.

Federal Laws: Drivers Privacy Protection Act; 
Restrictions: Prohibits obtaining and disclosing SSNs and other 
personal information from a motor vehicle record except as expressly 
permitted under the law.

Federal Laws: Health Insurance Portability and Accountability Act; 
Restrictions: Protects the privacy of health information that 
identifies an individual (including by SSNs) and restricts health care 
organizations from disclosing such information to others without the 
patient's consent.

Source: GAO analysis.

[End of table]

We reviewed selected legislative documents of 18 states and found that 
at least 6 states have enacted their own legislation to restrict either 
the display or use of SSNs by the private sector.[Footnote 12] Notably, 
in 2001, California enacted Senate Bill (SB) 168, restricting private 
sector use of SSNs. Specifically, this law generally prohibits 
companies and persons from certain uses such as, posting or publicly 
displaying SSNs and printing SSNs on cards required to access the 
company's products or services. Furthermore, in 2002, shortly after the 
enactment of SB 168, California's Office of Privacy Protection 
published recommended practices for protecting the confidentiality of 
SSNs. These practices were to serve as guidelines to assist private and 
public sector organizations in handling SSNs.

Similar to California's law, Missouri's law (2003 Mo. SB 61), which is 
not effective until July 1, 2006, bars companies from requiring 
individuals to transmit SSNs over the Internet without certain safety 
measures, such as encryption and passwords. However, while SB 61 
prohibits a person or private entity from publicly posting or 
displaying an individual's SSN "in any manner," unlike California's 
law, it does not specifically prohibit printing the SSN on cards 
required to gain access to products or services. In addition, Arizona's 
law (2003 Ariz. Sess. Laws 137), effective January 1, 2005, restricts 
the use of SSNs in ways very similar to California's law. However, in 
addition to the private sector restrictions, it adds certain 
restrictions for state agencies and political subdivisions.[Footnote 
13] For example, state agencies and political subdivisions are 
prohibited from printing an individual's SSN on cards and certain 
mailings to the individual. Last, Texas prohibits the display of SSNs 
on all cards, while Georgia and Utah's laws are directed at health 
insurers and, therefore, pertain primarily to insurance identification 
cards.[Footnote 14] None of these three laws contain the provisions 
mentioned above relating to Internet safety measures and mailing 
restrictions. Table 2 lists states that have enacted legislation and 
related provisions.

Table 2: Provisions Included in Enacted Legislation Reviewed:

Provision: Specifically prohibits display on cards; 
States Where Provision or Restriction Enacted: AZ, CA, GA, TX, UT.

Provision: Requires Internet safety measures; 
States Where Provision or Restriction Enacted: AZ, CA, MO.

Provision: Restricts mailing of SSNs; 
States Where Provision or Restriction Enacted: AZ, CA.

Source: GAO analysis.

[End of table]

Public Sector Entities Also Use SSNs and Some Agencies Limit Their Use 
and Display Even Though SSNs are Displayed in Some Public Records:

Agencies at all levels of government frequently obtain and use SSNs. A 
number of federal laws require government agencies to obtain SSNs, and 
these agencies use SSNs to administer their programs, verify 
applicants' eligibility for services and benefits, and do research and 
evaluation. Given the potential for misuse, some government agencies 
are taking steps to limit their use and display of SSNs and prevent the 
proliferation of false identities. However, given the open nature of 
certain government records, SSNs appear in some records displayed to 
the public. Our ongoing work is looking at the storage, display, and 
protection of SSNs in records displayed to the public.

Public Sector Entities Are Required by Laws and Regulations to Obtain 
SSNs and Use SSNs for Various Purposes:

Government agencies obtain SSNs because a number of federal laws and 
regulations require certain programs and federally funded activities to 
use the SSN for administrative purposes.[Footnote 15] Such laws and 
regulations require the use of the SSN as an individual's identifier to 
facilitate automated exchanges that help administrators enforce 
compliance with federal laws, determine eligibility for benefits, or 
both. For example, the Internal Revenue Code and regulations, which 
govern the administration of the federal personal income tax program, 
require that individuals' SSNs serve as taxpayer identification 
numbers.[Footnote 16] A number of other federal laws require program 
administrators to use SSNs in determining applicants' eligibility for 
federally funded benefits. The Social Security Act requires individuals 
to provide their SSNs in order to receive benefits under the SSI, Food 
Stamp, Temporary Assistance for Needy Families, and Medicaid 
programs.[Footnote 17] In addition, the Commercial Motor Vehicle Safety 
Act of 1986 requires the use of SSNs to identify individuals and 
established the Commercial Driver's License Information System, a 
nationwide database where states may use individuals' SSNs to search 
the database for other state-issued licenses commercial drivers may 
hold.[Footnote 18] Federal law also requires the use of SSNs in state 
child support programs to help states locate noncustodial parents, 
establish and enforce support orders, and recoup state welfare payments 
from parents.[Footnote 19] The law also allows states to record SSNs on 
many other state documents, such as professional, occupational, and 
marriage licenses; divorce decrees; paternity determinations; and death 
certificates, and to make SSNs associated with these documents 
available for state child support agencies to use in locating and 
obtaining child support payments from noncustodial parents.

Government agencies use SSNs for a variety of reasons. We found that 
most of these agencies use SSNs to administer their programs, such as 
to identify, retrieve, and update their records. In addition, many 
agencies also use SSNs to share information with other entities to 
bolster the integrity of the programs they administer. As unique 
identifiers, SSNs help ensure that the agency is obtaining or matching 
information on the correct person.

Government agencies also share information containing SSNs for the 
purpose of verifying an applicant's eligibility for services or 
benefits, such as matching records with state and local correctional 
facilities to identify individuals for whom the agency should terminate 
benefit payments. SSNs are also used to ensure program integrity. 
Agencies use SSNs to collect delinquent debts and even share 
information for this purpose. In addition, SSNs are used for 
statistics, research, and evaluation. Agencies responsible for 
collecting and maintaining data for statistical programs that are 
required by statute, make use of SSNs. In some cases, these data are 
compiled using information provided for another purpose. For example, 
the Bureau of the Census prepares annual population estimates for 
states and counties using individual income tax return data linked over 
time by SSN to determine immigration rates between localities.[Footnote 
20] SSNs also provide government agencies and others with an effective 
mechanism for linking data on program participation with data from 
other sources to help evaluate the outcomes or effectiveness of 
government programs. In some cases, records containing SSNs are 
sometimes matched across multiple agency or program databases.[Footnote 
21]

Finally, government agencies use employees' SSNs to fulfill some of 
their responsibilities as employers. For example, personnel departments 
of these agencies use SSNs to help them maintain internal records and 
provide employee benefits. In addition, employers are required by law 
to use employees' SSNs when reporting wages. Wages are reported to SSA, 
and the agency uses this information to update earnings records it 
maintains for each individual. The Internal Revenue Service (IRS) also 
uses SSNs to match the employer wage reports with amounts individuals 
report on personal income tax returns. Federal law also requires that 
states maintain employers' reports of newly hired employees, identified 
by SSNs. States must forward this information to a national database 
that is used by state child support agencies to locate parents who are 
delinquent in child support payments.

Government Agencies Are Taking Steps to Limit the Use and Display of 
SSNs:

Despite the widespread use of SSNs at all levels of government, not all 
agencies use SSNs. We found that some agencies do not obtain, receive, 
or use SSNs of program participants, service recipients, or individual 
embers of the public.[Footnote 22] Moreover, not all agencies use the 
SSN as their primary identification number for record-keeping purposes. 
These agencies maintain an alternative number that is used in addition 
to or in lieu of SSNs for certain activities.

Some agencies are also taking steps to limit SSNs displayed on 
documents that may be viewed by others who may not have a need to view 
this personal information. For example, the Social Security 
Administration has truncated individuals' SSNs that appear on the 
approximately 120 million benefits statements it mails each year. Some 
states have also passed laws prohibiting the use of SSNs as a student 
identification number. Almost all states have modified their policies 
on placing SSNs on state drivers' licenses.

At the federal level, SSA has taken steps in its enumeration process 
and verification service to help prevent SSNs from being used to 
proliferate false identities. SSA has formed a task force to address 
weaknesses in its enumeration process and has (1) increased document 
verifications and developed new initiatives to prevent the 
inappropriate assignment of SSNs to noncitizens, and (2) undertaken 
initiatives to shift the burden of processing noncitizen applications 
from its field offices.[Footnote 23] SSA also helps prevent the 
proliferation of false identities through its verification service, 
which allows state driver licensing agencies to verify the SSN, name, 
and date of birth of customers with SSA's master file of Social 
Security records. Finally, SSA has also acted to correct deficiencies 
in its information systems' internal controls. These changes were made 
in response to the findings of an independent audit that found that 
SSA's systems were exposed to both internal and external intrusion, 
increasing the possibility that sensitive information such as SSNs 
could be subject to unauthorized access, modification, and disclosure, 
as well as the risk of fraud.

Public Records Can Also Be a Source of SSNs:

Given the open nature of certain government records, SSNs appear in 
these records for a number of reasons. For example, SSNs may already be 
a part of a document that is submitted to a recorder for official 
preservation, such as veterans' discharge papers. Documents that record 
financial transactions, such as tax liens and property settlements, 
also contain SSNs to help identify the correct individual. As 
previously stated, government officials are required by law to collect 
SSNs in numerous instances. Moreover, some state laws allow government 
entities to collect SSNs on voter registries to help avoid duplicate 
registrations.

Courts at all three levels of government also collect and maintain 
records that are routinely made available to the public. Court records 
overall are presumed to be public. However, each court may have its own 
rules or practices governing the release of information. SSNs appear in 
court documents for a variety of reasons. In many cases, SSNs are 
already a part of documents that are submitted by attorneys or 
individuals. These documents could be submitted as part of the evidence 
for a proceeding or could be included as part of a petition for an 
action, such as a judgment or a divorce. In other cases, courts include 
SSNs on documents they and other government officials create, such as 
criminal summonses, arrest warrants, and judgments, to increase the 
likelihood that the correct individual is affected (i.e., to avoid 
arresting the wrong John Smith). Again, in some cases, federal law 
requires that SSNs be placed in certain records that courts maintain, 
such as child support orders.

In our prior report, we looked at the extent and nature of federal, 
state, and county governments' use of SSNs when they are contained in 
public records, and the options available to better safeguard SSNs that 
are found in these public records.[Footnote 24] Our findings led us to 
suggest that Congress consider addressing SSN security and display 
issues in state and local government and in public records, including 
those maintained by the judicial branch of government at all levels. We 
proposed that Congress convene a representative group of officials from 
all levels of government to develop a unified approach to safeguard 
SSNs used in all levels of government and particularly those displayed 
in public records.

At the request of this subcommittee, GAO was asked what types of public 
records SSNs are stored in, how are those records maintained, and to 
what extent SSNs are displayed inside those records. To do this work, 
we are surveying over 2,500 officials in state and local government 
agencies, including officials in all 50 states and the District of 
Columbia, and are conducting structured interviews of federal agencies. 
Our preliminary survey data show that the types of records most likely 
to contain SSNs and be made available to the general public by state 
government entities are court records, death records, UCC filings, and 
professional licensing records. At the local level, court records and 
land records are those most often cited as containing SSNs and being 
available to the general public. Preliminary data analysis indicates 
that identity verification is the most frequently given reason by both 
state and local respondents for collecting or using SSNs that are in 
records available to the public. Data matching and complying with state 
laws or regulations are also frequently cited as reasons for the 
collection or use of the SSN. However, responding state offices 
reported over 35 instances where they had no specific use for 
collecting SSNs.

Conclusions:

Public and private entities use SSNs for many legitimate and publicly 
beneficial purposes. However, the more frequently SSNs are obtained and 
used, the more likely they are to be misused. As we continue to learn 
more about the entities that obtain SSNs and the purposes for which 
they obtain them, Congress and state legislatures will be able to 
determine if there are ways to limit access to this valuable piece of 
information and prevent it from being misused. However, restrictions on 
access or use may make it more difficult for businesses and government 
agencies to verify an individual's identity. Accordingly, policy makers 
will have to balance restrictions on the use of SSNs on the one hand 
with legitimate needs for the use of SSNs on the other.

Although individuals may choose to provide their SSNs to public and 
private sector entities to obtain their services, individuals are often 
required to have their SSNs in records that may ultimately be displayed 
to the public. Such public display of personal information can create 
opportunities for identity crimes. Safeguarding SSNs in records 
displayed to the public offers an additional challenge because of the 
inherent tension between the nature of public records, that is, the 
need for transparency in government activities, and the need to protect 
individuals' privacy. For this reason, in prior work, we recommended 
that Congress convene a representative group of officials to develop a 
unified approach to safeguard SSNs used in all levels of government and 
particularly those displayed in public records. We continue to believe 
that this would be a useful step toward preventing SSN misuse while 
acknowledging the needs of various levels of government.

At this subcommittee's request, we are continuing work on SSNs and 
their presence in public records and look forward to supporting 
continuing congressional consideration of these important policy 
issues. That concludes my testimony, and I would be pleased to respond 
to any questions the subcommittee has.

Contacts and Acknowledgments:

For further information regarding this testimony, please contact 
Barbara D. Bovbjerg, Director; Tamara Cross, Assistant Director; or 
Alicia Cackley, Assistant Director of Education, Workforce, and Income 
Security Issues at (202) 512-7215. Individuals making key contributions 
to this testimony include Melinda Bowman, Raun Lazier, Joel Marus, and 
Caroline Sallee.

[End of section]

Appendix I: Federal Laws Affecting Information Resellers, CRAs, and 
Health Care Organizations:

Gramm-Leach-Bliley Act (GLBA):

GLBA requires companies to give consumers privacy notices that explain 
the institutions' information-sharing practices. In turn, consumers 
have the right to limit some, but not all, sharing of their nonpublic 
personal information. Financial institutions are permitted to disclose 
consumers' nonpublic personal information without offering them an opt-
out right in the following circumstances:

* to effect a transaction requested by the consumer in connection with 
a financial product or service requested by the consumer; maintaining 
or servicing the consumer's account with the financial institution or 
another entity as part of a private label credit card program or other 
extension of credit; or a proposed or actual securitization, secondary 
market sale, or similar transaction;

* with the consent or at the direction of the consumer;

* to protect the confidentiality or security of the consumer's records; 
to prevent actual or potential fraud, for required institutional risk 
control or for resolving customer disputes or inquiries, to persons 
holding a legal or beneficial interest relating to the consumer, or to 
the consumer's fiduciary;

* to provide information to insurance rate advisory organizations, 
guaranty funds or agencies, rating agencies, industry standards 
agencies, and the institution's attorneys, accountants, and auditors;

* to the extent specifically permitted or required under other 
provisions of law and in accordance with the Right to Financial Privacy 
Act of 1978, to law enforcement agencies, self-regulatory 
organizations, or for an investigation on a matter related to public 
safety;

* to a consumer reporting agency in accordance with the Fair Credit 
Reporting Act or from a consumer report reported by a consumer 
reporting agency;

* in connection with a proposed or actual sale, merger, transfer, or 
exchange of all or a portion of a business if the disclosure concerns 
solely consumers of such business;

* to comply with federal, state, or local laws; an investigation or 
subpoena; or to respond to judicial process or government regulatory 
authorities.

Financial institutions are required by GLBA to disclose to consumers at 
the initiation of a customer relationship, and annually thereafter, 
their privacy policies, including their policies with respect to 
sharing information with affiliates and non-affiliated third parties.

Provisions under GLBA place limitations on financial institutions 
disclosure of customer data, thus affecting some CRAs and information 
resellers. We found that some CRAs consider themselves to be financial 
institutions under GLBA.[Footnote 25] These entities are therefore 
directly governed by GLBA's restrictions on disclosing nonpublic 
personal information to non-affiliated third parties. We also found 
that some of the information resellers we spoke to did not consider 
their companies to be financial institutions under GLBA. However, 
because they have financial institutions as their business clients, 
they complied with GLBA's provisions in order to better serve their 
clients and ensure that their clients are in accordance with GLBA. For 
example, if information resellers received information from financial 
institutions, they could resell the information only to the extent that 
they were consistent with the privacy policy of the originating 
financial institution.

Information resellers and CRAs also said that they protect the use of 
non-public personal information and do not provide such information to 
individuals or unauthorized third parties. In addition to imposing 
obligations with respect to the disclosures of personal information, 
GLBA also requires federal agencies responsible for financial 
institutions to adopt appropriate standards for financial institutions 
relating to safeguarding customer records and information. Information 
resellers and CRA officials said that they adhere to GLBA's standards 
in order to secure financial institutions' information.

Drivers Privacy Protection Act (DPPA):

The DPPA specifies a list of exceptions when personal information 
contained in a state motor vehicle record may be obtained and used (18 
U.S.C. § 2721(b)). These permissible uses include:

* for use by any government agency in carrying out its functions;

* for use in connection with matters of motor vehicle or driver safety 
and theft; motor vehicle emissions; motor vehicle product alterations, 
recalls, or advisories; motor vehicle market research activities, 
including survey research;

* for use in the normal course of business by a legitimate business, 
but only to verify the accuracy of personal information submitted by 
the individual to the business and, if such information is not correct, 
to obtain the correct information but only for purposes of preventing 
fraud by pursuing legal remedies against, or recovering on a debt or 
security interest against, the individual;

* for use in connection with any civil, criminal, administrative, or 
arbitral proceeding in any federal, state, or local court or agency;

* for use in research activities;

* for use by any insurer or insurance support organization in 
connection with claims investigation activities;

* for use in providing notice to the owners of towed or impounded 
vehicles;

* for use by a private investigative agency for any purpose permitted 
under the DPPA;

* for use by an employer or its agent or insurer to obtain information 
relating to the holder of a commercial driver's license;

* for use in connection with the operation of private toll 
transportation facilities;

* for any other use, if the state has obtained the express consent of 
the person to whom a request for personal information pertains;

* for bulk distribution of surveys, marketing, or solicitations, if the 
state has obtained the express consent of the person to whom such 
personal information pertains;

* for use by any requester, if the requester demonstrates that it has 
obtained the written consent of the individual to whom the information 
pertains;

* for any other use specifically authorized under a state law, if such 
use is related to the operation of a motor vehicle or public safety.

As a result of DPPA, information resellers said they were restricted in 
their ability to obtain SSNs and other driver license information from 
state motor vehicle offices unless they were doing so for a permissible 
purpose under the law. These officials also said that information 
obtained from a consumer's motor vehicle record has to be in compliance 
with DPPA's permissible purposes, thereby restricting their ability to 
resell motor vehicle information to individuals or entities not allowed 
to receive such information under the law. Furthermore, because DPPA 
restricts state motor vehicle offices' ability to disclose driver 
license information, which includes SSN data, information resellers 
said they no longer try to obtain SSNs from state motor vehicle 
offices, except for permissible purposes.

Health Insurance Portability and Accountability Act (HIPAA):

The HIPAA privacy rule also defines some rights and obligations for 
both covered entities and individual patients and health plan members. 
Some of the highlights are:

* Individuals must give specific authorization before health care 
providers can use or disclose protected information in most nonroutine 
circumstances, such as releasing information to an employer or for use 
in marketing activities.

* Covered entities will need to provide individuals with written notice 
of their privacy practices and patients' privacy rights. The notice 
will contain information that could be useful to individuals choosing a 
health plan, doctor, or other service provided. Patients will be 
generally asked to sign or otherwise acknowledge receipt of the privacy 
notice.

Covered entities must obtain an individual's specific authorization 
before sending them marketing materials.

Health care organizations, including health care providers and health 
plan insurers, are subject to HIPAA's requirements. In addition to 
providing individuals with privacy practices and notices, health care 
organizations are also restricted from disclosing a patient's health 
information without the patient's consent, except for purposes of 
treatment, payment, or other health care operations. Information 
resellers and CRAs did not consider themselves to be "covered entities" 
under HIPAA, although some information resellers said that their 
customers are considered to be business associates under HIPAA. As a 
result, they said they are obligated to operate under HIPAA's standards 
for privacy protection, and therefore could not resell medical 
information without having made sure HIPAA's privacy standards were 
met.

Fair Credit Reporting Act (FCRA):

Congress has limited the use of consumer reports to protect consumers' 
privacy. All users must have a permissible purpose under the FCRA to 
obtain a consumer report (15 USC 1681b). These permissible purposes 
are:

* as ordered by a court or a federal grand jury subpoena;

* as instructed by the consumer in writing;

* for the extension of credit as a result of an application from a 
consumer or the review or collection of a consumer's account;

* for employment purposes, including hiring and promotion decisions, 
where the consumer has given written permission;

* for the underwriting of insurance as a result of an application from 
a consumer;

* when there is a legitimate business need, in connection with a 
business transaction that is initiated by the consumer;

* to review a consumer's account to determine whether the consumer 
continues to meet the terms of the account;

* to determine a consumer's eligibility for a license or other benefit 
granted by a governmental instrumentality required by law to consider 
an applicant's financial responsibility or status;

* for use by a potential investor or servicer or current insurer in a 
valuation or assessment of the credit or prepayment risks associated 
with an existing credit obligation; and:

* for use by state and local officials in connection with the 
determination of child support payments, or modifications and 
enforcement thereof.

Under FCRA, Congress has limited the use of consumer reports[Footnote 
26] to protect consumers' privacy and limits access to credit data to 
those who have a legally permissible purpose for using the data, such 
as the extension of credit, employment purposes, or underwriting 
insurance. However, these limits are not specific to SSNs. All of the 
CRAs that we spoke to said that they are considered consumer reporting 
agencies under FCRA. In addition, some of the information resellers we 
spoke to who handle or maintain consumer reports are classified as CRAs 
under FCRA. Both CRAs and information resellers said that as a result 
of FCRAs restrictions they are limited to providing credit data to 
their customers that have a permissible purpose under FCRA. 
Consequently, they are restricted by law from providing such 
information to the general public.

FOOTNOTES

[1] U.S. General Accounting Office, Social Security Numbers: Private 
Sector Entities Routinely Obtain and Use SSNs, and Laws Limit the 
Disclosure of This Information, GAO-04-11 (Washington D.C.: January 22, 
2004).

[2] See 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).

[3] GAO-04-11 (Washington D.C.: January 2004).

[4] GAO-02-352 (Washington D.C.: May 2002).

[5] GAO-02-352 (Washington D.C.: May 2002).

[6] United States Sentencing Commission, Identity Theft Final Alert 
(Washington, D.C.: Dec. 15, 1999).

[7] U.S. General Accounting Office, Identity Theft: Prevalence and Cost 
Appear to be Growing, GAO-02-363 (Washington, D.C.: Mar. 1, 2002). 

[8] A fraud alert is a warning that someone may be using the consumer's 
personal information to fraudulently obtain credit. When a fraud alert 
is placed on a consumer's credit card file, it advises credit grantors 
to conduct additional identity verification before granting credit. The 
three consumer reporting agencies offers fraud alerts that can vary 
from 2 to 7 years at the discretion of the individual. 

[9] Information resellers, sometimes referred to as information 
brokers, are businesses that specialize in amassing consumer 
information that includes SSNs for informational services. CRAs, also 
known as credit bureaus, are agencies that collect and sell information 
about the creditworthiness of individuals. Health care organizations 
generally deliver their services through a coordinated system that 
includes health care providers and health plans, also referred to as 
health care insurers.

[10] We found that CRAs and information resellers can sometimes be the 
same entity, a fact that blurs the distinction between the two types of 
businesses but does not affect the use of SSNs by these entities. Five 
of the six large information resellers we spoke to said they were also 
CRAs. Some CRA officials said that information reselling constituted as 
much as 40 percent of CRAs' business.

[11] During the enrollment process, subscribers have a number of 
options, one of which is decided whether they would like single or 
family coverage. In cases where family coverage is chosen, the SSN is 
the key piece of information generally allowing the family members to 
be linked.

[12] On the basis of our interviews with private sector businesses and 
organizations, contacts with some state offices of attorney general, 
and identified state laws and legislative initiatives related to the 
use of SSNs, we did a legislative review of 18 states that were 
identified as having laws or proposed laws governing SSN use. In the 18 
states we researched, we reviewed more than 40 legislative documents, 
including relevant laws, proposed laws, legislative summaries, and 
other related documents, such as state regulations, executive orders, 
and referendums.

[13] Political subdivisions would include counties, cities, and towns.

[14] Georgia's law (O.C.G.A. §33-24-57.1(f)) and Utah's law (Utah Code 
Ann. §31-22-634) are both effective July 1, 2004. However, Utah's law 
provides certain extensions until March 1, 2005. Texas' law (2003 Tex. 
Gen. Laws 341) is effective March 1, 2005.

[15] U.S. General Accounting Office, Social Security Numbers: 
Government and Commercial Use of the Social Security Number is 
Widespread, GAO/HEHS-99-28 (Washington D.C.: February 1999).

[16] This means that employers and others making payments to 
individuals must include the individuals' SSNs in reporting to IRS many 
of these payments. In addition, the Code and regulations require 
individuals filing personal income tax returns to include their SSNs as 
their taxpayer identification number, the SSNs of people whom they 
claim as dependents, and the SSNs of spouses to whom they paid alimony.

[17] Applicants give program administrators information on their income 
and resources, and program administrators use applicants' SSNs to match 
records with those of other organizations. 

[18] States may also use SSNs to search another database, the National 
Driver's Registry, to determine whether an applicant's license has been 
cancelled, suspended, or revoked by another state. In these situations, 
the states use SSNs to limit the possibility of inappropriately 
licensing applicants. 

[19] The law requires states to maintain records that include (1) SSNs 
for individuals who owe or are owed support for cases in which the 
state has ordered child support payments to be made, the state is 
providing support, or both, and (2) employers' records of new hires 
identified by SSN.

[20] The Bureau of the Census is authorized by statute to collect a 
variety of information, and the Bureau is also prohibited from making 
it available, except in certain circumstances.

[21] The statistical and research communities refer to the process of 
matching records containing SSNs for statistical or research purposes 
as "record linkage." See U.S. General Accounting Office, Record Linkage 
and Privacy: Issues in Creating New Federal Research and Statistical 
Information, GAO-01-126SP (Washington, D.C.: Apr. 2001).

[22] GAO-02-352 (Washington D.C.: May 2002).

[23] See U.S. General Accounting Office, Social Security 
Administration: Actions Taken to Strengthen Procedures for Issuing 
Social Security Numbers to Noncitizens but Some Weakness Remain, 
GAO-04-12 (Washington D.C.: October 15, 2003). See U.S. General 
Accounting Office, Social Security Numbers: Improved SSN Verification 
and Exchange of States' Driver Records Would Enhance Identity 
Verification, GAO-03-920 (Washington D.C.: September 15, 2003). 

[24] GAO-02-352 (Washington D.C.: May 2002)

[25] Under GLBA, the term financial institution is defined as "any 
institution the business of which is engaging in financial activities 
as described in section 4(k) of the Bank Holding Company Act of 1956," 
which goes into more detail about what are "activities that are 
financial in nature." These generally include banking, insurance, and 
investment industries.

[26] The FTC has determined that certain types of information, 
including SSNs, do not constitute as consumer report under FCRA because 
they are not factors in determining credit eligibility.