Tuesday, October 2, 2007
Banks Object to Bill Limiting Use of SS Numbers
Two new government initiatives to restrict the use of Social Security numbers have put banks on the defensive. As part of President Bush's Identity Theft Task Force, the FTC has sought comment on the necessity for such a widespread use of Social Security numbers and alternatives. In addition, the House Ways and Means Committee has approved a bill that would strictly limit the "sale, purchase, or display" of Social Security numbers. This bill is expected to be voted on this fall, but a companion bill has not yet been introduced in the House. Analysts say that the banking industry has voiced opposition to any efforts to limit the use of Social Security numbers, since these numbers are an integral part of their customer information files. Bank Technology News However, they are in danger of finding themselves in the midst of a public relations snafu, since it would not reflect well on banks to oppose efforts to protect customers' identity. Further, banks would arguably benefit from limiting the use of Social Security numbers in connection with account relationships, since one category of bank fraud losses, new account fraud, is directly tied to the use of stolen Social Security numbers. But those losses pale in comparison to the costs banks would incur in being required to shift to a different customer idenification number system.