Statement of Senator Dianne Feinstein
on the Social Security Number Misuse Prevention Act
July 11, 2002

Washington, DC - The Senate Finance Subcommittee on Social Security and Family today convened a hearing on legislation sponsored by Senators Dianne Feinstein (D-Calif.) and Judd Gregg (R-NH) that prohibits the sale or display of an individual's social security number without the individual's consent, with exceptions for business-to-business and business-to-government activity. The legislation was approved by the Senate Judiciary Committee on May 16, 2002.

The following is the prepared text of Senator Feinstein's statement:

"Mr. Chairman, I am pleased to testify today before the Finance Committee on S. 848, the Social Security Number Misuse Prevention Act of 2002, which I have authored with Senator Gregg. The bill before the Committee today is the culmination of five years of hard work - work done in conjunction with Senator Grassley, Senator Kyl, Senator Hatch, and the staffs of many Senate offices.

I, personally, have had countless meetings with industry groups, privacy groups, and even CEOs of major U.S. companies to develop a fair and balanced proposal on Social Security numbers. I have Chaired a half dozen hearings on identity theft issues in the Judiciary Subcommittee on Technology, Terrorism, and Government Information. And my staff has worked hard over the last five years to solicit the views of every conceivable party interested in this issue.

After sponsoring competing bills in the 106^th Congress, Senator Gregg and I spent several months hammering out a compromise bill. The compromise has gone through multiple stages of drafting and redrafting, and countless hours of additional meetings and staff work. The end result of this effort, I believe, is a bill that strengthens protections for Social Security numbers while minimizing costs to businesses and government entities.

I am pleased to report that as a result of the hard work we did to craft a reasonable compromise, the Senate Judiciary reported Social Security Number Misuse Prevention Act out of committee by a voice vote on May 16^th. While the source of our concern about Social Security numbers is not new, adoption of the legislation is even more urgent today because of the surge of identity theft crimes. Hundreds of thousands of Americans each year are victimized by identity theft.

Legislation restricting public access to Social Security numbers is pivotal to any successful campaign against identity theft. Social Security numbers play a particularly important role in identity theft because thieves use them to fraudulently obtain credit cards, access existing financial accounts, commit bank fraud, and falsely obtain employment and government benefits.

Michelle Brown of Los Angeles, for instance, had her Social Security number stolen, and it was used to charge $50,000 worth of goods and services, including a $32,000 truck, a $5,000 liposuction operation, and a year-long residential lease. While assuming Michelle's name, the perpetrator also became the object of an arrest warrant for drug smuggling in Texas.

In addition, identity thieves can use the numbers to create additional false identification documents, such as drivers' licenses. Not surprisingly, reports of Social Security number misuse have risen lockstep with the growth in identity theft. Allegations of Social Security number fraud have increased by 500 percent over the past several years from 11,000 in 1998 to 65,000 in 2001.

The goal of this legislation is straightforward- to get Social Security numbers out of the public domain so that identity thieves can't access the number. Let me describe the key provisions.

First, this bill prohibits anyone from selling or displaying an individual's Social Security number to the general public without the individual's consent, but does permit legitimate business-to-business and business-to-government uses of the number.

There is no adequate justification for allowing the sale of someone's Social Security number to a member of the general public.

This practice occurs today. A stranger or stalker can buy your Social Security number off the Internet for a few dollars. This is what happened to Amy Boyer of New Hampshire in 1999, when she was stalked and killed by a former classmate who paid $204 to obtain her birth date, Social Security number, address and place of employment from a website.

In another particularly troubling case, Christopher Jones of Pembroke, North Carolina, allegedly offered thousands of Social Security numbers for sale on eBay with an opening bid of $1.00 per number for a block of 1,000 numbers.

Second, this legislation gives consumers the right to refuse to give out their Social Security numbers to companies that don't really need it. Companies, however, can still require Social Security numbers for purposes under the Fair Credit Reporting Act, for background checks, if required by law, or if the number is necessary to verify identity or prevent fraud.

Third, this legislation curbs the public display of Social Security numbers on government documents. Specifically, the bill removes Social Security numbers from government checks (within three years) and driver's licenses (within one year). Starting in the year 2005, the bill requires the redaction of Social Security numbers on 11 key public records before their release to the public.

The 11 documents are:

- death certificates,

- occupational licenses,

- property settlement documents,

- birth certificates,

- land ownership records,

- marriage licenses,

- bankruptcy case files,

- court judgments,

-child support documents,

- and tax liens.

Government documents represent a huge source of Social Security numbers for identity thieves. A recent survey by the General Accounting Office found that 119 of 251 counties (47%) that maintain public records, give out records with Social Security numbers to the public. Of even greater concern, 11 of the counties in the General Accounting Office study give the public access to records with Social Security numbers via the Internet.

A complete stranger should not be able to get access to my Social Security number from my birth certificate or marriage license - especially just by logging onto the Internet!

Mr. Chairman, this legislation is fundamental to protecting the identities of American citizens. I urge the Finance Committee to support this proposal because it strikes a balance between legitimate business uses of the Social Security number and the need to prevent identity theft.

Some privacy groups think we are permitting too much commercial use of the Social Security numbers. Some business groups argue that we've come down too hard on legitimate use of the numbers. I've learned that when everybody is a little dissatisfied - a compromise is a good one.

###