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Indiana Department of Financial Institutions

DFI > Education > Education Information > Credit Information > Miscellaneous Credit Information > My Social Security Number - How Secure Is It? My Social Security Number - How Secure Is It?

Introduction

When Social Security numbers were first issued in 1936, the federal government assured the public that use of the numbers would be limited to Social Security programs. Today, however, the Social Security number (SSN) is the most frequently used recordkeeping number in the United States. SSN are used for employee files, medical records, health insurance accounts, credit and banking accounts, university ID cards, and many other purposes. In fact, the Social Security number is now required for dependents over one year of age if the parents claim the child for tax purposes.

Why is my Social Security number used so often as an identification number?

Computer records have replaced paper filing systems in most businesses and government agencies. Since more than one person may share the same name, accurate retrieval of information works best if each file is assigned a unique number. Many businesses and government agencies believe the Social Security number is tailor-made for this purpose.

Why is it important to keep my Social Security number private?

Banks and credit card companies are reporting an increase in SSN-related fraud. Even though the SSN offers advantages for identification and record-keeping purposes, the widespread use of SSNs makes invasions of privacy and fraud easier to commit.

The crime of identity theft is increasing at epidemic proportions. With Social Security numbers accessible to so many people, it is relatively easy for someone to fraudulently use your SSN to assume your identity and gain access to your bank account, credit services, utility billing information, driving history, and other sources of personal information. Identity thieves can also establish new credit and bank accounts in your name.

Your Social Security number is also frequently used as your identification number in a wide variety of computer data bases, giving access to information you may want kept private and allowing an easy way of linking data bases. Therefore, it is wise to limit access to your Social Security number whenever possible.

Am I required to give my Social Security number to government agencies?

It depends upon the agency. Some government agencies, including tax agencies, welfare offices, and the Department of Motor Vehicles (DMV) can require your Social Security number as mandated by federal law (42 USC 405 (c)(2)(C)(v) and (i)). Others may request the SSN in such a manner that you are led to believe you must provide it.

The Privacy Act of 1974 requires all government agencies--federal, state and local--which request Social Security numbers to provide a "disclosure" statement on the form. The statement tells you if you are required to provide your Social Security number or if it is optional, how the SSN will be used and what will happen if you refuse to provide it. If you have given your SSN to a government agency after 1990, it cannot become part of a public record. (see 5 USC 552a, note.) The U.S. Office of Management and Budget, Office of Information and Regulatory Affairs (OIRA) provides guidance and oversight regarding the Privacy Act of 1974. The text of the Privacy Act can be found at the website www.usdoj.gov/foia/privstat.htm.

The Privacy Act states that you cannot be denied a government benefit or service if you refuse to disclose your SSN unless the disclosure is required by federal law, or the disclosure is to an agency which has been using SSNs previous to January 1975, the date when the Privacy Act went into effect.

If you are asked to give your Social Security number to a government agency and no disclosure statement is included on the form, complain and cite the Privacy Act. Unfortunately, there appear to be no penalties when a government agency fails to provide a disclosure statement.

Do I have to provide my Social Security number to private businesses?

Usually you are not legally compelled to provide your Social Security number to private businesses including private health care providers and insurers unless you are involved in a transaction in which the Internal Revenue Service requires notification. (MediCal and Medicare are government health plans and can require a Social Security number.)

There is no law, however, which prevents businesses from requesting your Social Security number, and there are few restrictions on what businesses can do with it. Also, even though you are not required to disclose your Social Security number, the business does not have to provide you with service if you refuse to release it.

If a business insists on knowing your Social Security number when you cannot see a reason for it, speak to an administrator who may be authorized to make an exception or who may know that company policy does not require it. If the company will not allow you to use an alternate number, you may want to take your business elsewhere.

Credit card applications usually request Social Security numbers. Your number is used primarily to verify your identity in situations where you have the same or a similar name to others. Although most credit grantors will insist on having your SSN, you may be able to find a credit grantor who will provide you credit without knowing your SSN, especially if you are persistent and can provide other forms of identification.

Can my employer use my Social Security number as an employee identification number?

Yes. However, the Social Security Administration discourages employers from displaying Social Security numbers on documents that are viewed by other people, such as badges, parking permits or on lists distributed to employees. Employers do, however, need each employee's Social Security number to report earnings and payroll taxes.

Why do financial transactions require my Social Security number?

In 1961 the Internal Revenue Service (IRS) began using Social Security numbers as taxpayer ID numbers (TIN). Therefore, SSNs are required on records of transactions in which the IRS is interested. That includes most banking, stock market, property or other financial transactions as well as employment records. Since your Social Security number must be included on all of these sensitive financial documents, it is important to limit other uses of the number.

How can a school use my Social Security number?

Schools that receive federal funding must comply with the Family Educational Rights and Privacy Act (FERPA, also known as the "Buckley Amendment," enacted in 1974, 20 USC 1232g) in order to retain their funding. One of FERPA's provisions requires written consent for the release of educational records or personally identifiable information, with some exceptions. The courts have stated that Social Security numbers fall within this provision.

FERPA would apply to state colleges, universities, and technical schools that receive federal funding. An argument can be made that if such a school displays students' SSNs on identification cards or distributes class rosters or grades listings containing SSNs, it would be a release of personally identifiable information, violating FERPA. However, many schools and universities have not interpreted the law this way and continue to use SSNs as a student identifier. To succeed in obtaining an alternate number to the SSN, you will probably need to be persistent and cite the law.

(The FERPA text can be found at the web, www.cpsr.org/cpsr/privacy/ssn/ferpa.buckley.html.)

When the school is a private institution, your only recourse is to work with the administration to change the policy or at least to let you use an alternate identification number as your student ID.

Social Security numbers may be obtained by colleges and universities for students who have university jobs and/or receive federal financial aid.

Public schools, colleges and universities that ask for your SSN fall within the provisions of another federal law, the Privacy Act of 1974. This act requires such schools to provide a disclosure statement telling students how the Social Security number is used. If you are required to provide your SSN, be sure to look for the school's disclosure statement. If one is not offered, you may want to file a complaint with the school, citing the Privacy Act.

How can I avoid releasing my Social Security number?

Here are some strategies to protect your Social Security number:

1. Adopt an active policy of not giving out your SSN unless you are convinced it is required or is to your benefit. Make people show you why it is needed.

2. Never print your Social Security number on your checks, business cards, address labels or other identifying information. And do not carry your SSN card in your wallet, or other cards containing the SSN. Your wallet could be lost or stolen. Attempt to resist merchants' requests to write your SSN onto your checks. Explain how you could become a victim of banking fraud if someone were to use your SSN and account number to gain access to your bank or credit accounts, or to open new accounts in your name.

3. Request a copy of your Social Security Professional Earnings and Benefit Estimate Statement at least every three years to make certain the information in the file is correct. Contact the Social Security Administration at (800) 772-1213 to learn how to order this free report. If incorrect information is recorded, contact the Social Security Administration immediately. Someone may be fraudulently using your SSN for employment purposes. The Social Security Administration's fraud department can be reached at (800) 269-0271. Its website is www.ssa.gov.

4. Order a copy of your credit report each year. If you are a victim of identity theft, the credit report will contain evidence of credit or banking fraud committed using your name and SSN. It will also show other SSNs associated with your name.

5. If a private business requests your Social Security number:

  • Leave the space for the Social Security number on the form blank or write "refused" in that space.
  • Speak to someone in authority or write to the business and explain why you do not want your Social Security number used to identify you. If you do not receive satisfaction from the first person you contact, go to a person in the organization with more authority. Sometimes the first person you contacted has been told no more than to be sure the form is filled out completely.
  • Insist that the company document its policy of requiring a Social Security number. If a written policy cannot be found or too much time is taken hunting for one, the business may allow you to use an alternate number.
  • Ask why your Social Security number is requested and suggest alternatives.
  • If the company insists on having your Social Security number, tell it you will take your business elsewhere. If the company persists, follow through on your promise.

6. In California, utilities cannot deny you service if you refuse to provide your Social Security number. However, a deposit may be required if you will not provide the information.

7. If your employer releases your Social Security number, you may want to explain why you object to its release. Most employers do not treat Social Security numbers as confidential information. But they may be willing to change their policy when they understand the twin dangers of invasion of privacy and fraud.

8. If your bank, credit union, or other financial service provider uses your Social Security number as a personal identification number (PIN) or as the identifier for banking by phone, write a letter of complaint. Demand to have a different PIN and/or identification number assigned. Explain why the SSN is an extremely poor choice for a banking security or identification code. If you use the last four digits of your SSN as your PIN for ATM and other banking or credit transactions, change it to something else, but not to a common number such as your birthdate.

9. If your state's Department of Motor Vehicles uses the SSN as the driver's license number, ask for an alternate number. Most states will grant one.

For more information

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