|Gary Foreman is a former Certified Financial Planner (CFP) who currently writes
about family finances and edits
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Someone told me you weren't supposed to put your social security
number on your checks. Also you shouldn't have your number on your
driver's license since that number is used for a lot of private
things. Can you give me some input on this subject? --Marsha
Marsha has asked a question that we
should all be considering. How free should I be in releasing my
social security number? And, frankly, what you're about to read
isn't going to make you comfortable.
Originally social security numbers
were not to be used for identification. It even said so on your
social security card. But no law was ever passed to support that.
Recently, as our society has grown
more complex the trend has been to use your social security number
in many more places. They've cropped up on driver's licenses,
mailing labels, student ID's.
Surprisingly, the Social Security
Administration has no legal authority to keep anyone from asking for
your number. Nor can they control what someone does with it once
they get it.
To further complicate matters, some
people want to use social security numbers to catch bad guys. The
1996 Immigration Reform Act required states to get a valid social
security number before issuing a driver's license. The goal was to
catch illegal immigrants. Some states used that change to move
toward using social security numbers as a license number.
Others have proposed requiring the
use of your social security number for other government services.
The goal was to catch 'dead beat dads' and other criminals. An
admirable goal, but questionable from a privacy point of view.
Currently, there are two problems
with the way social security numbers are being used. The first is
that many organizations use your social security number as a
password. Knowing the number gets you access to the account. Clearly
that makes it easy for anyone who knows your number to pretend to be
The second problem is that many
places use your social security as an ID number. Banks, hospitals,
brokers and others all find it convenient. Names and addresses can
change. But, your social security number remains the same. So that
number makes it easy to identify you. But it also means that your
number isn't nearly as private as it once was.
And that's created an entirely new
crime called 'identity theft'. According to the U.S. Secret Service
identity theft crimes cost about $1 billion last year. It's
estimated that there are 500,000 new victims yearly which is why
identity theft protection has become a huge industry over the last few years.
Identity thieves will open a new
credit account using your name. All they need is your social
security number and date of birth. To keep you unaware of the crime
they'll have the bills sent to their address. You'll never know
about the account. Naturally they won't pay the bills and you'll be
left with the bad credit entries.
Thieves can also use your social
security number to change the address on an existing account.
They'll request an additional card and begin to make charges but you
won't see any statements.
And it's not just credit cards. Many
savings institutions will allow a caller to transact business in an
account if they have the name and social security number. They can
transfer money out of your bank account without ever setting foot in
Pretty scary, huh? And it's not hard
to steal your social security number. It's often listed on billing
and investment statements. All it takes is the theft of one
statement from your mailbox. Would you even notice that it was
What's interesting is that in most
identity theft cases the police don't consider you to be the victim
of a crime. That's because the card issuer is liable for the
fraudulent bills. Unfortunately your reputation doesn't have a
So how can you protect yourself? The
American Association of Retired Persons suggests that you do not
print your social security number on your checks. They also advise
that you not carry your social security card with you. But that's
only the beginning.
The real question is what happens
when you want to do business with someone and they ask for your
number. Private organizations can demand your number for almost
anything. You can refuse to give it to them. But then they can
choose not do business with you.
For instance, when you move the
utility company may ask for your number before they initiate service
to your home. They can do a credit check without your number. And
they will if you request it. But that will take longer. And you
might not be willing to wait to get your electricity turned on.
When someone asks for your social
security number find out why they need it. Expect to provide it when
you apply for credit. For anything else, you might want to consider
refusing the request.
You'll also want to know how they'll
use your number once they have it. Will they access your credit file
once and that's it? Remember, the information that you provide may
not remain private. Even 'reputable' businesses have been known to
sell blocks of social security numbers.
There's no one right answer for all
situations. Just a lot of grey area. But by considering the request
you should have a reasonable chance to come to a good decision.
Finally, check your credit report
often. Anyone misusing your social security number will leave
evidence in your credit file. They're just counting on you not to
Check your credit rating at least
once a year. There are three main credit reporting agencies. By law
they may charge you up to $8 for your report unless you have been
denied credit due to their report within the last 60 days.
- Equifax: 800-685-1111
- Experian (formerly TRW): 800-682-7654
- Trans Union: 800-888-4213
Naturally you don't want to have to
pay for the report. Consider it low cost insurance against the
hassle of an identity theft.
So, should Marsha provide her social
security number? Only when she feels that it's really necessary. And
she, like all of us, needs to be alert for unusual activity.