House Hearing, 112TH Congress - The Role of Social Security Numbers in Identity Theft and Options To Guard Their Privacy

THE ROLE OF SOCIAL SECURITY NUMBERS
IN IDENTITY THEFT AND OPTIONS

TO GUARD THEIR PRIVACY
HEARING
BEFORE THE
SUBCOMMITTEE ON SOCIAL SECURITY

OF THE
COMMITTEE ON WAYS AND MEANS

U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
APRIL 13, 2011
Serial No. 112SS2

Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON SOCIAL SECURITY
SAM JOHNSON, Texas, Chairman
KEVIN BRADY, Texas

PAT TIBERI, Ohio
AARON SCHOCK, Illinois
ERIK PAULSEN, Minnesota
RICK BERG, North Dakota
ADRIAN SMITH, Nebraska
XAVIER BECERRA, California

LLOYD DOGGETT, Texas
SHELLEY BERKLEY, Nevada
FORTNEY PETE STARK, California
ii
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CONTENTS
Page
Advisory of April 13, 2011, announcing the hearing ............................................
WITNESSES
The Honorable Patrick P. OCarroll Jr., Inspector General, Social Security
Administration .....................................................................................................
Maneesha Mithal, Associate Director of the Division of Privacy and Identity
Protection, Federal Trade Commission ..............................................................
Theresa L. Gruber, Assistant Deputy Commissioner, Office of Operations,
Social Security Administration ...........................................................................
7
17
34
SUBMISSIONS FOR THE RECORD
Juan J. Martinez, Ph.D. ..........................................................................................

Helene Perry ............................................................................................................
LifeLock ....................................................................................................................
Patrick P. OCarroll Jr. ...........................................................................................
Maneesha Mithal .....................................................................................................
Theresa L. Gruber ...................................................................................................
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57
62
72
78
iii
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THE ROLE OF SOCIAL SECURITY NUMBERS

IN IDENTITY THEFT AND OPTIONS
TO GUARD THEIR PRIVACY
WEDNESDAY, APRIL 13, 2011
U.S. HOUSE OF REPRESENTATIVES,

COMMITTEE ON WAYS AND MEANS,
SUBCOMMITTEE ON SOCIAL SECURITY,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:02 p.m., in Room
B318, Rayburn House Office Building, the Honorable Sam Johnson [chairman of the subcommittee] presiding.
[The advisory of the hearing follows:]
(1)
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HEARING ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
Chairman Johnson Announces Hearing

on the Role of Social Security Numbers
in Identity Theft and Options to
Guard Their Privacy
April 06, 2011
Congressman Sam Johnson (RTX), Chairman, Subcommittee on Social Security
of the Committee on Ways and Means, today announced that the Subcommittee will
hold a hearing to examine the role of Social Security numbers in identity theft and
options to guard their privacy. The hearing will take place on Wednesday,
April 13, 2011, in room B318 Rayburn House Office Building, beginning at
2:00 p.m.
In view of the limited time available to hear witnesses, oral testimony at this
hearing will be from invited witnesses only. However, any individual or organization
not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing.
BACKGROUND:
Identity theft is the fastest growing type of fraud in the United States, affecting
11.1 million victims in 2009, up 12 percent since 2008. The Federal Trade Commission (FTC) estimates that identity theft costs consumers about $50 billion annually.
Further, identity theft is often used to facilitate other crimes, including credit card,
document, or employment fraud. The Social Security number (SSN) is especially valuable to identity thieves as it serves as the key to authenticating an individuals
identity in order to open accounts or obtain other benefits in the victims name.
Although created in 1936 solely to track workers earnings for Social Security benefit purposes, use of the SSN has become widespread. Largely because the SSN is
permanent and unique to an individual, SSNs are used by many industries, including financial institutions, insurers, universities, health care providers, and government agencies. While many SSN uses are beneficial and required by law, such as
for purposes of employment and taxation, other uses may not be necessary, such as
displaying it on an identification card.
Despite its important role, there is no Federal law that requires comprehensive
confidentiality protection for the SSN. However, there are laws that provide limited
SSN confidentiality. For example, the Gramm-Leach-Bliley Act (P.L. 106102) restricts the reuse and redisclosure of certain personal information, including SSNs,
by financial institutions. Also, many States have enacted legislation to restrict the
use, disclosure, or display of SSNs.
In 2006, the President established an Identity Theft Task Force to coordinate Federal agencies efforts against identity theft. One of many recommendations in its
2007 report was to decrease the unnecessary use of SSNs in the public sector. In
response to the Task Forces mandate for the study of private sector uses of SSNs,
the FTC developed recommendations to reduce the availability of SSNs to identity
thieves while preserving legitimate uses.
In announcing the hearing, Chairman Sam Johnson (RTX) stated, Americans
are rightly worried about the security of their personal information, including their Social Security number. We must stop overuse and abuse of
Social Security numbers in order to help prevent ID theft and further protect Americans privacy.
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FOCUS OF THE HEARING:
The Subcommittee will examine the impacts of identity theft, the role of SSNs in
abetting identity theft, and options to restrict its use. In addition, the role of the
SSN in administering Social Security programs and how the Social Security Administration protects SSNs will be considered, along with legislative proposals to limit
the use of SSNs.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee
website and complete the informational forms. From the Committee homepage,
http://waysandmeans.house.gov, select Hearings. Select the hearing for which you
would like to submit, and click on the link entitled, Click here to provide a submission for the record. Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by the close
of business on Wednesday, May 4, 2011. Finally, please note that due to the
change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical
problems, please call (202) 2251721 or (202) 2253625.
FORMATTING REQUIREMENTS:
The Committee relies on electronic submissions for printing the official hearing
record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission,
but we reserve the right to format it according to our guidelines. Any submission
provided to the Committee by a witness, any supplementary materials submitted for
the printed record, and any written comments in response to a request for written
comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will
be maintained in the Committee files for review and use by the Committee.
1. All submissions and supplementary materials must be provided in Word or WordPerfect
format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official
hearing record.
2. Copies of whole documents submitted as exhibit material will not be accepted for printing.
Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material
not meeting these specifications will be maintained in the Committee files for review and use
by the Committee.
3. All submissions must include a list of all clients, persons and/or organizations on whose
behalf the witness appears. A supplemental sheet must accompany each submission listing the
name, company, address, telephone, and fax numbers of each witness.
The Committee seeks to make its facilities accessible to persons with disabilities.
If you are in need of special accommodations, please call 2022251721 or 202226
3411 TTD/TTY in advance of the event (four business days notice is requested).
Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.
Note: All Committee advisories and news releases are available on the World
Wide Web at http://www.waysandmeans.house.gov/.
Chairman JOHNSON. The subcommittee will come to order.

Welcome, everyone.
Identity theft is a lasting and devastating crime. Victims spend
years having to prove who they are, while monitoring credit reports, fending off collection agencies or the IRS for charges they
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never made or wages they never earned. Some are picked up by
law enforcement by crimes committed by the ID theft using their
name. Americans have every reason to be concerned.
According to the Congressional Research Service, in 2009 ID
theft claimed over 11 million victims and cost consumers about $50
billion annually. The Privacy Rights Clearinghouse reports the
total number of known records that have been compromised due to
security breaches beginning in January 2005 through last week
topped 500 million. Just yesterday, in my own state of Texas, the
comptrollers office announced the largest security breach in state
history: some 3.5 million personal files were mistakenly left on a
computer file available to the public, putting current and retired
state employees at risk.
Even though Social Security numbers were created to track earnings for determining eligibility and benefit amounts under Social
Security, the numbers are widely used as personal identifiers.
Some of the uses of these numbers in preventing fraud are vital to
many commercial and government operations. Examples include
enforcing child support, aiding law enforcement, and compiling information from many sources to help ensure the accuracy of credit
reports.
Unfortunately, as pointed out by GAO in testimony before this
subcommittee, Social Security numbers have become the identifier
of choice, and are used for everyday business transactions. In fact,
in their April 2007 report, the Presidents Identity Theft Task
Force identified the Social Security number as the most valuable
commodity for an identity thief.
Even worse, identity theft continues to threaten our national security. As said in the 9/11 Commission report, fraud and identification documents is no longer just a problem of theft. At many entry
points to vulnerable facilities, including gates for boarding airplanes, sources of identification are the last opportunity to ensure
that people are who they say they are, and to check whether or not
they are terrorists.
Congress needs to get to work on identity theft and limiting access to Social Security numbers is an excellent place to start. For
years, Ways and Means Subcommittee on Social Security has been
working on this problem in a bipartisan way. In fact, Mr. Doggett
and I have been on a bill year after year to try to do this. We have
approved bills to protect the privacy of Social Security numbers
and prevent identity theft since the 106th Congress, when it first
approved the Social Security Number, Privacy, and Identity Theft
Prevention Act.
The legislation was first introduced on a bipartisan basis by
then-subcommittee chairman Clay Shaw, and then-ranking member, the late Bob Matsui. Despite numerous attempts, Congress has
not been able to close the deal. Sadly, Social Security number use
is so widespread across so many industries that the committees of
jurisdiction have yet to reach agreement on the right approach to
limiting their use.
Still, I believe this committee can make progress. To that end,
today I am reintroducing, with Mr. Doggett, the Medicare Identity
Theft Prevention Act, a bill to remove the Social Security number
from the Medicare card. It makes no sense that people are told,
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Dont carry your Social Security card in order to protect your identity, but then every senior citizen is told, Carry your Medicare
card, which displays prominently the Social Security number.
The risk of ID theft goes far beyond the card being stolen. Every
medical record at nursing homes, hospitals, and doctor offices has
a Social Security number written on it. The wholesale amount of
Social Security numbers that are available to identity thieves is
staggering and completely unnecessary.
You know, just last night I was dealing with the TV guys on
cable. Guess what they asked for?my Social Security number to
prove it was me. Can you believe that? Well, I didnt know what
to say.
The Centers for Medicare and Medicaid Services have refused to
act. If they wont do what is right for Americas seniors, we will.
I thank my colleague from Texas for his work on this issue, and
I urge my other colleagues to support this issue, as well.
The problem of identity theft is not going to be addressed with
one single piece of legislation. But protecting Medicare cards carried by 47 million Americans is a good place to start. I will say that
if the military can remove Social Security numbers, CMS ought to
be able to do the same.
I look forward to hearing from each of our witnesses, and thank
them in advance for sharing with us their experiences and their
recommendations. And thank you all for being present today.
And I now yield to my friend, Xavier Becerra, our ranking member.
Mr. BECERRA. Mr. Chairman, thank you very much for calling
this hearing. As you just said, millions of Americans are harmed
each year, due to the misappropriation of their identities. This subcommittee is deeply concerned about this particular problem. In
fact, we have held 17 previous hearings on this subject since 2000,
the year 2000.
Let me urge this subcommittee to show the same diligence and
thoroughness in examining some other critical issues that we will
be confronting soon surrounding Social Security, such as the impact of cuts to the Social Security Administrations (SSA) operating
budget proposed for this year, and the consequences for people, for
example, who are waiting for their disability benefits. Also, the impact of cuts to the Social Security Administrations operating budget on the ability of the SSA to prevent waste, fraud, and abuse, and
certainly in regards to the impact on seniors retirement security
from the kinds of Social Security benefit cuts that budget Chairman Paul Ryan has proposed and praised.
While we may have different views on the importance of Social
Security benefits for todays seniors and future retirees, we are
united in our concern about identity theft. Identity theft ruins individuals good names, and destroys their credit ratings. It has even
ruined the future credit ratings of young children. This subcommittee has heard from many victims of identity theft, and have
described the extensive harm that they have suffered, as a result
of identity fraud, harm which continues long after the fraud is discovered. Identity theft crimes carry a total cost to Americans of
over $17 billion.
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I welcome the testimony of the Social Security Administration
and its inspector general. I also welcome the testimony of the Federal Trade Commission, which plays a critical role in protecting
consumers from identify theft.
Chairman Johnson, I look forward to joining you and others in
reintroducing identity theft legislation for this new Congress, and
I am hoping that we can make significant progress as we work together in that regard.
Before I yield back my time, Mr. Chairman, if I could yield one
minute to the gentleman from Texas, Mr. Doggett.
Mr. DOGGETT. Thank you. While I shared the broader concerns
that Mr. Becerra has just outlined, I just want to applaud your
leadership on this, Mr. Chairman. I agree with every word you said
about the subject that is up today, identity theft.
This is at least the third Congress in which you and I have been
in partnership, trying to solve this problem. We actually passed it
through the House in 2008, despite a lot of bureaucratic obstacles
that were thrown up, and then the bureaucracy managed to kill it
over in the Senate Finance Committee, or it would already be law.
I think one of the most effective ways for the bureaucracy to
stand in the way of something that they dont want to move quickly
on is to throw up a big cost estimate. And that is what has happened here. And we have been trying to get the specifics for
months, if not years, from CMS about their claim that it will be
too costly for them to protect the Identity of our seniors. They need
to come forward with their study, and it needs to be well-founded.
And we should not let their objections stand in the way, again, of
doing what is right by our seniors and, as you said, at least doing
for folks who rely on Medicare what the military has already been
able to do for our military men and women and for our veterans.
I thank you, Mr. Chairman. Thank you, Mr. Becerra.
Chairman JOHNSON. The gentleman from California, you are
recognized.
Mr. STARK. Mr. Chairman, I am pleased that you called this
markup, and proud to be a cosponsor of your bill, and I would ask
you if you would consider, and if the committee would not object,
we introduced legislation that would address the problem of identity theft for foster children. The foster childrens Social Security
numbers often pass through many hands, and we have encountered
problems when the children age out of foster care, they have found
that their identity has already been stolen, and people have opened
credit cards, and so forth. And we have some language that I hope
you would consider adding to your legislation that would protect
these very vulnerable children.
I know that Mr. Delay worked with us years ago on doing this,
and I look forward to seeing if we can include this in your
Chairman JOHNSON. Yes, I am sure Mr. Doggett would agree.
Mr. DOGGETT. Absolutely.
Chairman JOHNSON. We will certainly look at it.
Mr. STARK. Thank you, Mr. Chairman.
Mr. BECERRA. Chairman, we are pleased that you have called
this hearing, and I would yield back the balance of my time.
Chairman JOHNSON. Thank you, Mr. Becerra. Let me tell you
we are getting a vote in about 10 or 15 minutes, maybe 20. There
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will be four votes and three of them are five minutes. So we will
break when that occurs and come back after the votes, which will
be about a half-hour.
Today we are joined by three witnesses. Our first witness is the
honorable Patrick OCarroll, Jr. He is the Social Security Administration Inspector General. Next is Maneesha Mithal, who is the Associate Director of the Division of Privacy and Identity Protection
at the Federal Trade Commission. And lastly we will hear from
Theresa Gruber, who is the Assistant Deputy Commissioner, Office
of Operations at the Social Security Administration.
So, all I would ask you is stop dragging your feet and let us get
these things done.
[Laughter.]
Chairman JOHNSON. Mr. OCarroll, you are recognized. I welcome all of you, and thank you for being here.
STATEMENT OF PATRICK P. OCARROLL, JR.,
INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION
Mr. OCARROLL. Good afternoon, Chairman Johnson, Congressman Becerra, and Members of the Subcommittee. Thank you for
the invitation to testify today.
We all understand the serious threat and damaging effects of
identity theft. But to better illustrate the issue, I would like to
present one victims story. Dr. Juan Martinez, born and raised in
Chicago, was thrilled to accept a teaching position at the University of Chicago in 2005. Soon after he began working in his hometown, however, Dr. Martinez received a letter from the IRS that
stated he failed to pay his taxes on wages earned the previous year
in Colorado. The letter arrived with a substantial bill.
Someone had stolen his identity, and Dr. Martinez was left to
prove his case to the IRS. Dr. Martinez and his wife struggled for
several years, as they disputed charges with the IRS, and attempted to track down the person who was fraudulently using Dr.
Martinezs name, Social Security number, and birth date.
In 2010, Dr. Martinez learned that a bank account was opened
in his name in Missouri. Authorities in Chicago referred the case
to one of our special agents in St. Louis. Working with the bank
where the account was opened, our agent quickly identified and located the man who illegally used Dr. Martinezs information for
five years. The man admitted to purchasing false identity documents, and using Dr. Martinezs name to get a job, rent an apartment, and open a bank account. Last month he was sentenced to
seven months in prison and ordered to pay restitution of more than
$5,000 to Dr. Martinez.
Now, Dr. Martinez and his family may finally breath a sigh of
relief. We in OIG are very pleased to have helped Dr. Martinez.
And while he could not be here today, he has prepared a written
statement about his ordeal, and we would like to enter that into
the record.
[Dr. Martinez statement for the record follows:]
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As the case illustrates, identity theft places a huge burden on the

victims. Use of the SSN is still widespread throughout government
programs and financial transactions. And with technology constantly evolving, stealing SSNs and entire identities has become
even easier. As we pursue investigations similar to the case of Dr.
Martinez, our agents participate in SSN misuse task forces across
the country, investigating identity theft, as well as mortgage, bankruptcy, and benefit fraud.
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My office has done work that led to the removal of the SSN from
the selective service mailings. We have also recommended its removal from other government documents and IDs, such as the
Medicare card. The Department of Defense recently announced it
will remove the SSN from military IDs, and we agree that this is
a step in the right direction to protect valuable personal information.
SSA, though, still cannot prohibit the collection and use of SSNs.
Our investigative and audit work has taught us that the more
SSNs are used, the higher the probability that these numbers can
be used to commit crimes. Our recent recommendations to SSA include: supporting legislation to limit public and private entities use
of the SSN; continuing efforts to safeguard and protect personal information; and ensuring the highest level of online security before
offering replacement Social Security cards over the internet.
We have recently completed audits that question the collection of
students SSNs in kindergarten through 12th grade, as well as
state and local governments collection and use of SSNs. We have
also completed reviews on assigning SSNs to non-citizens with
fiancee visas and exchange visitor visas. Although temporary residents may be authorized to work in the United States, we question
whether they should receive SSNs which will remain valid for life.
We are currently reviewing SSAs controls over how the Agency
issues SSN print-outs, which are often used as a substitute for replacement Social Security cards. We plan to issue that report this
summer.
In conclusion, we must continue to ensure the integrity of the
enumeration process, limit the use and public display of the SSN,
encourage SSN protection, and provide meaningful penalties for
those who misuse the SSN or fail to protect it. My office will continue to work with you and SSA to maintain and improve the integrity of the Social Security number.
Thank you again for this invitation to testify today, and I will
be happy to answer any questions.
[The prepared statement of Mr. OCarroll follows:]
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Chairman JOHNSON. Thank you. I am told that most of the stolen numbers are from young people who have not yet begun to
work. Is that your information?
Mr. OCARROLL. I would qualify that by saying that a lot of
them belong to children that havent begun to work. And when people are vacuuming up numbers that are out there, often times they
are targeting childrens numbers. But I cannot say it is exclusive.
Chairman JOHNSON. That is because they have not ever recorded them anywhere.
Mr. OCARROLL. Agreed.
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Chairman JOHNSON. Yes. Thank you.
Ms. Mithal, you are recognized for five minutes.
STATEMENT OF MANEESHA MITHAL, ASSOCIATE DIRECTOR

OF THE DIVISION OF PRIVACY AND IDENTITY PROTECTION,
FEDERAL TRADE COMMISSION
Ms. MITHAL. Chairman Johnson, Ranking Member Becerra, and

Members of the Subcommittee, I am Maneesha Mithal from the
Federal Trade Commission. I appreciate the opportunity to present
the FTCs views on the role of Social Security numbers and identity
theft.
Protecting consumers against identity theft is a critical component of our consumer protection mission. The Commissions written
testimony describes the widespread use of SSNs in our economy, as
well as its role in facilitating identity theft. In my oral statement
I would like to focus on the FTCs activities to implement the recommendations of the Presidents 2007 identity theft task force,
which the FTCs chairman co-chaired, along with the attorney general. I would like to highlight our implementation of four recommendations, in particular.
First, we have tried to find ways to reduce the use of SSNs in
the public and private sectors. As to the public sector, federal agencies have taken a lot of steps to eliminate or restrict the use of
SSNs. Most recently, as we have heard, the Department of Defense
announced that it would stop using SSNs on military ID cards as
of June 2011.
As to the private sector use of SSNs, we hosted a workshop and
issued a report recommending federal legislation in a variety of
areas. Among other things, we recommended legislation to reduce
the public display of SSNs, and to improve consumer authentication.
Second, a key component of our efforts to combat identity theft
is to make sure that consumers sensitive data, including SSNs,
dont fall into the hands of identity thieves. To that end, we enforce
laws requiring companies to maintain reasonable security of consumers information. Since 2001, the Commission has brought over
30 law enforcement actions challenging businesses that failed to
reasonably protect sensitive consumer information.
Several of these cases have involved breaches of SSNs. One example is Choice Point. We sued Choice Point and alleged that it
sold sensitive information about more than 160,000 consumers to
identity thieves. We obtained $15 million in monetary relief against
the company.
More recently, we settled actions against three sellers of credit
reports. These sellers allowed hackers to access sensitive credit report information, including SSNs. The settlements require each
company to have comprehensive information security programs in
place.
We also brought a case against a company called LifeLock, which
deceptively advertised its identity theft protection services. Now,
you may recall LifeLocks ads, in which the CEO displayed his own
real Social Security number, stating that he guaranteed protection
against identity theft. Of course, he later became a victim of identity theft. We worked with 36 state attorneys general to bring a
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case against the company for deceptive practices, and we obtained

$12 million in monetary relief.
Third, in addition to bringing cases, we provide consumer assistance and education. We manage a toll-free Identity theft hotline,
along with a dedicated website through which we receive 15,000 to
20,000 contacts each week. Callers to the hotline receive counseling
from trained personnel on steps they can take to prevent or recover
from identity theft.
We also make available a wide variety of consumer education
materials, including many in Spanish, to help consumers deter, detect, and defend against identity theft. I am now holding some examples of our consumer education materials, and I would be happy
to provide additional copies to your staff after the hearing.
One successful strategy in disseminating our materials has been
to provide them to first responders. For example, because victims
often report identity theft to local law enforcement agencies, we inform these agencies on how to talk to victims. The FTC and its
partners have provided identity theft training to over 5,400 law enforcement officers from over 1,700 agencies. Similarly, we have created a comprehensive guide to pro bono attorneys and legal services clinics who assist low-income identity theft victims.
Finally, we serve as a clearinghouse for information about identity theft. We make information in our complaint database available to over 2,000 law enforcement partners. To assist law enforcement and policy makers, we also routinely issue reports on the
number and nature of identity theft complaints we receive. Most
recently we announced that in 2010 we received 250,000 identity
theft complaints, which represents 19 percent of the total number
of complaints we received. Identity theft has remained a top complaint category for more than a decade.
Fighting identity theft continues to be a top priority for the FTC,
and we look forward to working with the subcommittee on this important issue.
[The prepared statement of Ms. Mithal follows:]
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Chairman JOHNSON. Ms. Gruber, you are recognized for five

minutes.
34
STATEMENT OF THERESA L. GRUBER, ASSISTANT DEPUTY

COMMISSIONER, OFFICE OF OPERATIONS, SOCIAL SECURITY ADMINISTRATION
Ms. GRUBER. Thank you. Chairman Johnson, Ranking Member

Becerra, and Members of the Subcommittee, my name is Theresa
Gruber, and I am the Assistant Deputy Commissioner for Operations at the Social Security Administration. I have worked for the
Agency for nearly 20 years, starting in one of our field offices in
Minnesota. In my current role I oversee the operation of more than
1,200 Social Security offices, 8 card centers, 33 1800-number teleservice centers, and 8 processing centers.
Thank you for the opportunity to discuss how we assign Social
Security numbers, and the role that the Social Security number, or
SSN, can play in identity theft. My written statement provides details on the history of the SSN, and I will focus today on what we
have done to improve and strengthen our enumeration and card
issuance processes.
Originally, the only purpose of the Social Security number was
to keep an accurate record of earnings under Social Security, and
to pay benefits based on those earnings. We provided the SSN card
to show what SSN we assigned to a particular individual, with the
idea that, when shown to an employer, that employer would be
able to properly report that individuals earnings. The card was
never intended, and does not serve, as a personal identification document.
Assigning SSNs has been one of our most important and significant workloads. Since the inception of the program, we have assigned about 465 million Social Security numbers. Last fiscal year
we assigned 5.5 million original Social Security numbers, completed 11.5 million requests for replacement cards, and processed
over 1 billion verifications of SSNs.
Although the card is not an identification document, unscrupulous individuals use the SSN to steal identities and obtain false
identification documents.
I would like to thank you for helping us to strengthen our SSN
assignment process, for example, through the enactment of the Intelligence Reform and Terrorism Prevention Act of 2004. As a result of this legislation, we have implemented numerous changes to
our assignment process. We added new security features to the
card to help prevent counterfeiting. We also limited the number of
replacement cards we issue to any one individual, and established
new, rigorous standards for evidence.
As an agency, we are always looking for ways to improve the security and efficiency of our records. For example, we know that we
have to expand the pool of nine-digit numbers available for assignment. To that end, we plan to implement this summer a new assignment methodology called SSN randomization. Randomization
will help protect the Social Security number by eliminating any geographic significance in the number, and making it more difficult
to reconstruct an SSN using public information. As a result, the
new process will also extend the pool of SSNs available for assignment nationwide.
We have also taken a number of steps to improve the way we assign Social Security numbers. First, we opened two new Social Se-
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curity card centers, bringing our total now to eight. These specialized centers process all applications for original SSNs and replacement cards in specific metropolitan areas.
In coordination with the Department of State and the Department of Homeland Security, we expanded the Enumeration at
Entry program, permitting all individuals applying for an immigrant visa to elect to receive an SSN at the time of initial admission. This program allows us to use information collected and
verified by both agencies to assign an SSN automatically.
We have implemented and are continuing to enhance our new
Social Security Number Application Process, which our field offices
use to process SSN applications. This automated system ensures
uniform compliance with our enumeration policies and evidence requirements.
In conclusion, we must remember that with all the improvements
in the way we assign SSNs, the Social Security card is still just a
record of an SSN assigned to an individual, and not an identity
document. We understand the use of the SSN for other purposes
has grown exponentially over the years. The challenge we face is
to balance our commitment to assigning SSN numbers quickly and
accurately, with the equally important need to maintain the integrity of the enumeration system, and to prevent SSN fraud.
I want to thank the Chairman and the Members of the Subcommittee for inviting me here today, and look forward to your continued support for our Agency and our mission. I will be happy to
answer any questions.
[The prepared statement of Ms. Gruber follows:]
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Chairman JOHNSON. Thank you for your testimony. And we

will proceed to questions.
Let me ask you a question, first. How much does it cost to issue
a Social Security card?
Ms. GRUBER. It depends on the manner in which you get the
card. If you come into one of our
Chairman JOHNSON. You mean all the offices arent the same?
46
Ms. GRUBER. Well, actually, if you come into our field office, it
costs about $32. If you go through one of our automated processes,
a process called Enumeration at Birth, where we assign a Social
Security number for a child who is born, that is about $8. And
Chairman JOHNSON. Eighty?
Ms. GRUBER. Eight dollars.
Chairman JOHNSON. Oh.
Ms. GRUBER. And if you do it through the Enumeration at
Entry program that I talked about, it is about $5.
Chairman JOHNSON. How about if we charged for that?
Ms. GRUBER. We would be happy to work with the subcommittee on exploring that option.
Chairman JOHNSON. You all think about that. Let me ask you
a couple of questions.
Mr. OCarroll, do you have all the tools you need to protect the
Social Security number?
Mr. OCARROLL. Chairman Johnson, as we have heard during
the testimony here, the number is out of the box, and it is pretty
widely displayed, and it is out there. So it is pretty hard to keep
the SSN as private and secure as we would have preferred and
liked.
But, with that, I think the tools that we could use are any ways
to limit the collection of Social Security numbers, much like you
were saying, when a vendor is asking for it but doesnt need it. The
display of Social Security numbers is a problem. We have been trying to get SSNs off of government checks. It is being removed from
some government IDsas you are proposing now, off of the Medicare cardand that is another good tool. And the last one is just
the collection of SSNs, in terms of limiting financial institutions
collection of Social Security numbers, which can end up in a PII
breach, as you discussed in Texas. That is another concern of ours.
So, what we are looking for is more of any tool that will at least
prevent it being displayed more than it is now, and being compromised.
Chairman JOHNSON. I understand that while we have restricted the number of Social Security number replacement cards,
people can visit a local office and get a print-out with their number
on it. And that they can easily be used by ID thieves. Why is it
we are doing that? I mean isnt it just as easy to print them a new
card?
Mr. OCARROLL. Well, we are almost a victim of a success on
that one. And under the Identity Theft Act that was passed by
Congress we have limited the number of cards that are being
issued. So, remember, in the past it was unlimited numbers of
cards going to people. That has been restricted now, and so
Chairman JOHNSON. Well, it is still free, isnt it?
Mr. OCARROLL. It is still free, but we are limiting the number
that can be received each year, and the number in a lifetime. And
what that caused is anybody who needs a Social Security number,
hasnt been safeguarding it, doesnt keep it carefully, is coming into
the offices now, asking for the print-outs instead of a replacement
card.
And I think a secondary problem that has come with the printout is a lot of employers, rather than get a Xerox copy of a Social
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Security card, are asking for what they think is more recently updated information, and asking for the print-outs, which is causing
another group of people to come in requesting the print-outs.
And that leads to two of our concerns. One is the identification
requirements for an original card are much more strict than it is
to get a print-out. So what is happening now is there is this secondary market for the print-outs, and often times they are not as
good a means of identification as Social Security cards.
Chairman JOHNSON. Well, why do we have to do print-outs at
all? Why cant they get a replacement card, if they can?
Mr. OCARROLL. Well, they can, but only a limited number of
times. And there is also a concern due to the Freedom of Information Act
Chairman JOHNSON. Three times ought to be enough. I mean
how many times have you lost your card?
Mr. OCARROLL. I havent. I still have the one that my parents
got when I was a little child.
Chairman JOHNSON. Okay.
Mr. OCARROLL. It was with my fathers stuff that I inherited
from him.
But I agree with you. I think that is why there is a limit to the
number of times an individual can get a replacement card. But a
lot of people believe that under Freedom of Information Act they
are entitled to this print-out.
So, I am more concerned with just making sure that the proper
identification is used when they get the print-out so that we know
it is the right person, that they are not using secondary, less reliable types of identification to get that print-out, that it has the
same level of integrity as the card.
And then, as you had brought up earlier, maybe if there was a
charge for getting the print-outs, it would diminish the number of
times that it was asked for. As it stands now, employers are
charged if they purchase a print-out from SSA; individuals are not.
Chairman JOHNSON. Okay. Well, I am not hot about that idea.
Mr. Becerra, you are recognized for five minutes.
Mr. BECERRA. Thank you, Mr. Chairman. Ms. Mithal, let me
ask you a question. In the private sector right now we have a
patchwork of regulations to deal with the use of the Social Security
number. Can you give us some examples of industries that are
doing a good job of trying to protect the number, and perhaps an
industry that is not doing such a good job of protecting the privacy
of an individuals Social Security number?
Ms. MITHAL. I think it would be difficult to provide an industry
example. We can provide examples of best practices. So, for example, if you do not need the Social Security number, do not ask for
it. It is something that we have implemented as an agency, at the
FTC. I remember when I started over 10 years ago, I used to have
to put my Social Security number on a leave slip. And we do not
have to do that any more. And I think that is a practice that we
would encourage the private sectorif you do not need the Social
Security number, do not collect it.
Mr. BECERRA. Okay. And I have heard that some of these information resellers have some of the worst practices around, that
some of these Internet information resellers actually advertise that
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with little more than your name, your city, and state, they can sell
you a Social Security number for a few dollars. Is that still the
case? Is there any regulation of those resellers?
Ms. MITHAL. There is. In fact, a couple of years ago we brought
a number of cases against those who were posing as consumers,
and getting information about them. And so we have a law that
prohibits unfair or deceptive practices. And we alleged that that
was an unfair practice. And so there are laws covering that practice.
Mr. BECERRA. And finally, give us a sense. If you were addressing people who are concerned about their identity and it being stolen, as each and every one of us here is, what would be the best
advice you give to any American to try to safeguard his or her Social Security number?
Ms. MITHAL. There are several things I would say. I would say
treat it like you would cash. Secure it. Do not carry it around. Any
documents that you dispose of, get a shredder. Make sure that if
you are providing your number online, that you practice safe computing, that you update your anti-spyware and anti-malware software, that you check your accounts frequently, and that you order
your free credit report, which you are entitled to once a year, from
the three major credit reporting agencies.
Mr. BECERRA. Good advice. Ms. Gruber, a quick question. What
does SSA say to individuals as they come in contact with your offices about the integrity of their number and protecting it?
Whatis there anything you tell them, other than respond to the
questions they may have about the reason they are there?
They may be coming for benefits, or to apply for something. But
does anyone take the time to say, By the way, you know, you
should be securing your Social Security number, et cetera, et
cetera?
Ms. GRUBER. Thank you, Ranking Member Becerra, that is a
very good question. We do. Our efforts are multi-faceted. When
folks come in to apply for a replacement card, we do absolutely remind them, as both my colleagues have mentioned, to not carry it
with them. In fact, it says that on the card.
On our website, we have a number of publications, and frequently asked questionsin fact, I think we have 11 of themthat
deal with identity theft, that deal with how to safeguard the card.
And we know that they are very widely used. We get thousands of
hits every month on those types of things.
And when a person does suspect that their SSN has been misused or stolen, we do talk to them aboutand encourage them to
take a number of steps, including working with the FTC, including
working with IRS, and frequently monitoring their financial accounts, their credit reports. Even if they are not a victim of identity
theft, we encourage folks to do that, which is what all of our literature, that is pretty widely available, says.
Mr. BECERRA. Well, I hope, with your good assistance, the
three of you, that this perhaps will be the last time we have to hold
a hearing on identity theft, because perhaps this time Congress
could get together, working with our chairman, to finally pass a bill
out of the House and hopefully out of the Senate, so we can deal
with this, Mr. Chairman, as I think most of us believe we should
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have done a long time ago, and get this taken care of. Because it
is a shame that tens of billions of dollars are lost by Americans
and, as well, much of their sanity in life because somebody stole
their identity.
So, I thank you for your testimony, again. And, Mr. Chairman,
I am pleased that you were able to bring them together to have
this hearing.
Chairman JOHNSON. Thank you. We have a good panel. We are
having a vote right now. I am going to recess the committee, and
it will be about 30, 45 minutes before we get back. Thank you.
Mr. BRADY. Hey, Mr. Chairman?
Chairman JOHNSON. Yes?
Mr. BRADY. Can I go on the record saying I really appreciate
Ms. Mithals recommendation that we carry cash? If you could talk
to my wife about giving me some, I would be very appreciative.
[Laughter.]
Mr. BRADY. I am with you on that.
[Recess.]
Chairman JOHNSON. The meeting will come back to order. Mr.
Paulsen is recognized for questions.
Mr. PAULSEN. Thank you very much, Mr. Chairman. And
thank you. This has been an interesting hearing. Maybe I can start
with Mr. OCarroll.
You know, in your testimony you mentioned, or you highlighted
at least, the fact that temporary residents may have authorization
to work in the United States for a limited time, and you questioned
sort of the propriety of assigning an SSN to those folks, which is
valid for life. Since an SSN number may be a key to their ability
to overstay his or her visa, would you briefly overview for us your
work in this area, how you reached this conclusion, and how Social
Security has responded to some of those concerns you raised?
Mr. OCARROLL. Yes, Mr. Paulsen. We have done a number of
reports on this issue. We looked at both the fiancee visas, where
you come into the country, you say that you are going to be here
to get married, and in that time period you are allowed months in
the United States prior to your marriage. At that point, the fiancee
will come in, get a Social Security number, and let us say, for example, the marriage does not happen, that person leaves the country. That SSN that the person was given is now out there forever.
And then, we also looked at the visas that are issued to foreign
students that come to the United States to work for summer
Chairman JOHNSON. Wait a minute. Can I stop you
Mr. OCARROLL. Yes, sir.
Chairman JOHNSON. If they are going out of the country, why
cant we stop them at immigration on the way out?
Mr. OCARROLL. No, meaning what happens with the SSN,
then, is that that number for that individual now exists for perpetuity.
Chairman JOHNSON. But you dont make them give the card
up?
Mr. OCARROLL. No.
Chairman JOHNSON. Can we?
Mr. OCARROLL. That is something we will have to look at. Let
me look into that and see if that is a possible solution.
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Mr. PAULSEN. If you could give a follow-up to it, Ms. Gruber,
just to kind of get some feedback, too. But please continue on.
Mr. OCARROLL. And then, the other one that we were finding
is with the students that are coming in for summer work. That is
a very similar one to what Chairman Johnson was saying. At the
end of their work, at which point they have been issued an SSN,
they work for a summer, they go back to their country of residence,
in many cases never to come back into the United States again, we
have a concern. Why issue a Social Security number for that?
One of the solutions would be to instruct the IRS to give them
a tax identification number, as opposed to having to give them an
SSN would be a possible solution.
Mr. PAULSEN. Ms. Gruber, maybe you can follow up regarding
the Agencys view on this, and how you and Mr. OCarroll work together, perhaps, on some of these issues?
Ms. GRUBER. Sure. Thank you, Mr. Paulsen. A couple of things.
You know, one of the reasons we actually assign an SSN to someone who might be here temporarily is that we, under law, are required to do soif they have DHS or Department of Homeland Security authorization to work, under the law we have to assign them
an SSN.
There are valid reasons why somebody who has a temporary status hereas long as they have work authorizationmight actually
want to work. And eventually, if they gain permanent status, they
could use those credited earnings while they were here lawfully,
but temporarily for their benefits in the future. In order to make
a change, it would require a change to the Social Security Act, actually, to not issue an SSN to folks who are here lawfully, who do
have authorization to work.
And one other final thing, Mr. Paulsen. The Social Security card
itself does not really give them the ticket to work. They have to
have the card plus the DHS documentation.
Mr. PAULSEN. Okay. Mr. OCarroll, any other follow-up on that,
or
Mr. OCARROLL. I think that pretty well covers it.
Mr. PAULSEN. Okay. Ms. Mithal, maybe I can ask you. The
Presidents task force, you know, a few years back did a lot of work
on public display of SSNs, and all the problems surrounding identity theft that I think were a part of that effort. The 2007 strategic
plan referred to identity theft as a problem with no single cause
and no single solution.
However, they did develop a whole list of recommendations, like
30, 31. You know, the very first recommendation was decreasing
the unnecessary use of SSNs in the public sector. Why was that the
number one recommendation?
Ms. MITHAL. Well, I think it is fairly obviously that one of the
sources of identity theft is the ubiquity of Social Security numbers
that are out there. And one of the things that we need to do to address the practice is to make sure they dont get into the hands of
identity thieves in the first place. And it seems that reducing the
public display of Social Security numbers, reducing the use of
them, would be a natural first step. And we decided, well, let us
clean our own house, start with the public sector, before we get to
the private sector.
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Mr. PAULSEN. Well, Mr. Chairman, I think that makes sense,
in terms of a number one recommendation. So, thank you, I yield
back.
Chairman JOHNSON. Mr. Becerra, do you have another question you would like to ask?
Mr. BECERRA. Mr. Chairman, I think we probably asked and
had them answer these questions 17 different times. So I think we
know what we have to do, and we just hope that they can continue
to offer us some good advice as we try to move forward.
Chairman JOHNSON. Yes. Well, let me ask one, then. You know
there is close to 50 million Medicare cards floating around with Social Security numbers on them. How can people protect themselves
from medical ID theft?
Mr. OCARROLL. Well, that was one of our recommendations
from one of our audits, was the susceptibility of the public to having their number compromised, because it is on the Medicare card.
And at the time, we recommended to SSA to explore ways of working with HHS, which has jurisdiction over the Medicare card, to
look into having the number taken off.
And what we found at the time was a couple of things. And I will
ask Terry to elaborate, but about $30 million would be the cost to
SSA of just retooling to take the number off of the card. And HHS
said it would cost about $300 million take and 8 to 12 years to do
it. So with that, I will yield to SSA.
Chairman JOHNSON. Okay. Mr. Brady, do you care to question?
Mr. BRADY. Yes, sir. One, I appreciate, Chairman, you holding
this hearing today in the bipartisan nature. Two, I think the bill
that has been or being introduced puts a heavy emphasis on prevention of the theft in the first place. And I want to drive the point
or the need for that because on the back end, my understanding
is that it is rare that we catch and prosecute those who are good
at identity theft.
And my question is, out of the 11 million victims in 2009, not all
of them were directly victims of the theft created through the Social Security number. But the average person, senior, anyone, who
is an identity theft victim through Social Security number, what
are the chances that the criminal who does that gets caught and
prosecuted? Any idea?
Mr. OCARROLL. In the inspector generals office at SSA, we get
about a half-a-million public contacts a year, most related to allegations of waste, fraud, and abuse at SSA. And we figure about half
of those allegations relate to misuse of the Social Security number.
A large portion of them are either referred to SSA, HHS, or the
FTC. From that group, we generally look into anything related to
misuse of Social Security benefits or related to Social Security in
some other way.
So we investigate about 500 SSN misuse cases a year. That is
about five percent of our investigations. Almost every one of them
will end up with a conviction because by the time we open a case,
we know that it is sufficient enough of a violation that we will have
a positive result.
But again, that is a very small percentage, as you are seeing.
From 500,000 contacts down to about 500 investigations is what we
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are looking at from our agency. And I will yield to the FTC on the
more global
Ms. MITHAL. Yes, but we are not a criminal enforcement agency, so I would have to defer to DoJ on that. But I can say that the
crime really ranges from a pick-pocket, taking your credit card for
a joy ride, to a terrorist that is stealing peoples identity to commit
bad acts against the country.
And so, I think thethere is really no hope of catching all the
identity thieves. And I think you are absolutely right, that we need
to focus on prevention, victim assistance, and making sure that Social Security numbers do not fall into the wrong hands.
Mr. BRADY. And actually, just to clarify, I am frustrated by the
lack of prosecution. I am not looking to your agencies, but overall,
I think it is just very rare. My pet peeve is I see a lot of resources
being used, when I turn on the TV and see time and money being
used to pursue Marion Jones or Bobby [sic] Bonds or Roger
Clemens, or issues like that. I look at those teams and think, How
many victims of Social Security identity theft could be helped, you
know, if we applied the same type of rigor and ambition toward
catching those? One, we should be preventing in the first place,
and two, really prosecuting them harshly if they are caught. I
think it is right to put an emphasis on prevention. I do think we
need to have a much higher prosecution rate on the back end, as
well.
So, Chairman, thank you very much. And, Ms. Gruber, I did not
mean to ignore you. Any comments?
Ms. GRUBER. I think that both of my colleagues summed it up
pretty well, and we certainly know how tough it is when we have
an interview with somebody who is a victim of identity theft. Their
life is turned upside down. And so we understand.
Mr. BRADY. Thank you, Chairman.
Chairman JOHNSON. Thank you. Mr. OCarroll, you got any
ideas how we can, you know, stem the tide of identity theft or stolen cards or something like happened in Texas, for instance? Can
you talk to that issue? And how can we fix it?
Mr. OCARROLL. We have several concerns. One, of course, is
identity theft for financial purposes. The other one that we are running into is identity theft where people are illegally using other
peoples numbers to live and work in the United States. And we all
know the problems that follow. Either you are going to be much
like the doctor I talked about, where you are going to have someone
elses wages posted against your record that the IRS is expecting
to pay taxes on, and it takes years to get that straightened out.
So as we said before, any way that we can prevent the use of the
Social Security number out there is going to shrink the problem
down in size from where it is right now, where everybody has that
concern of losing your identity.
If we are not getting very good results from the prosecution side,
let us focus on the prevention side. And prevention is a lot of the
different tools that we have talked about. And everybody has got
to be very careful with their information. For instance, sometimes
phone calls are made, where there is the phishing scam to get your
information out there, so dont volunteer it yourself.
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Also, I think we are all concerned that the material that is in

your mailbox can be stolen that has all of your personal information. Often times there is an application for a credit card in the
same stack of mail with your personal information on it.
So, I think if this committee could consider ways of preventing
the publication of Social Security numbers, it would be a step in
the right direction.
Chairman JOHNSON. Well, we can look at that. You know, I do
not know exactly how we would do that, though. You know, you
can make laws until you are blue in the face, and people do not
follow them.
Mr. OCARROLL. I encourage the enforcement side, too, as a deterrent, I must say.
Chairman JOHNSON. Yes. Well, thank you all. I appreciate you
waiting for us.
Do you have any further questions, Mr. Becerra?
I appreciate you all being here today. I look forward to working
with all of you to stem the tide of theft by better protecting our Social Security numbers. And I thank you for being here. The hearing
is adjourned.
[Whereupon, at 3:34 p.m., the subcommittee was adjourned]
[Submissions for the Record follow:]
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[Questions for the Record follow:]
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Maneesha Mithal
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House Hearing, 112TH Congress - The Role of Social Security Numbers in Identity Theft and Options To Guard Their Privacy

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House Hearing, 112TH Congress - The Role of Social Security Numbers in Identity Theft and Options To Guard Their Privacy

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THE ROLE OF SOCIAL SECURITY NUMBERS

IN IDENTITY THEFT AND OPTIONS

SUBCOMMITTEE ON SOCIAL SECURITY

COMMITTEE ON WAYS AND MEANS

APRIL 13, 2011

Serial No. 112SS2

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For sale by the Superintendent of Documents, U.S. Government Printing Office

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COMMITTEE ON WAYS AND MEANS

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KEVIN BRADY, Texas

XAVIER BECERRA, California

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Advisory of April 13, 2011, announcing the hearing ............................................

SUBMISSIONS FOR THE RECORD

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Juan J. Martinez, Ph.D. ..........................................................................................

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THE ROLE OF SOCIAL SECURITY NUMBERS

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U.S. HOUSE OF REPRESENTATIVES,

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Chairman Johnson Announces Hearing

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Chairman JOHNSON. The subcommittee will come to order.

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As the case illustrates, identity theft places a huge burden on the

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