Associated Press Online - May 09, 2000 18:54

By ALICE ANN LOVE

Associated Press Writer

WASHINGTON (AP) - Congress is considering new protection for consumers from misuse of Social Security numbers, which have become both a virtual national ID and a powerful tool for criminals.

"Although the Social Security number was never intended to be a national identification number, it has rapidly evolved to be the de facto identifier," James Huse, the Social Security Administration's inspector general, testified Tuesday at a House subcommittee hearing.

Americans benefit in some ways from the widespread use of a common identification number by many government agencies and businesses, which share and sometimes sell them. The military uses them, and state motor vehicle departments. So do tax and public assistance agencies, health insurers, schools, banks.

Upsides to the situation include instant credit checks that allow people to buy and take home new cars on the spot or get "preapproved" credit cards in the mail. Also, police can easier track suspects.

"Yet many people have started to wonder about the proliferating uses of Social Security numbers, and the privacy and security implications of all of this," said Rep. Clay Shaw, R-Fla., chairman of the House Ways and Means subcommittee on Social Security.

The widespread use of Social Security numbers can give people with dishonest intentions easy access to others' personal records, including financial and medical data, or help criminals assume another person's identity to obtain credit or government benefits.

The Social Security Administration's fraud hot line received 62,000 phone calls last year from Americans claiming misuse of their Social Security numbers.

John Stevens Jr., 72, an Air Force retiree, told lawmakers how con artists used his and his wife's Social Security numbers to obtain credit in their names and run up bills of $113,000.

"There is a very severe identity theft problem in this country, caused by the free access and widespread use of the Social Security number as the primary and sometimes the only means used to identify a person," Stevens said.

Among possible congressional action lawmakers discussed at the hearing:

-Ban sale of Social Security numbers.

-Require government agencies and businesses to obtain permission before sharing a person's Social Security number.

-Increase penalties for fraud committed with the use of another person's Social Security number.

-Make government agencies and businesses give people the option of using identification numbers other than their Social Security numbers.

Shaw expects to have legislation prepared within a few weeks.

In the Senate, New Hampshire Republican Judd Gregg says he will offer an amendment banning sale, sharing or other use of a person's Social Security number without permission. The amendment would be attached to a broader bill aiming to improve government security, which the Senate is to vote on soon.

Business groups and some state and local governments have opposed restrictions in the past as a costly and inefficient way to devise new and disparate identification systems.

Only federal agencies are restricted in the use and disclosure of Social Security numbers, which are issued to help the national retirement system keep track of individuals' earnings and benefits.

Many states use the numbers on drivers' licenses, although some, including Ohio and Georgia, have made that optional to protect privacy.

It is neither illegal nor unusual for businesses to request, share or sell Social Security numbers for tracking customers, or along with other information used for marketing or financial background checks.

Social Security numbers are sold by information brokerage firms, along with other personal data gathered legally from public documents such as court files, tax liens and professional licenses. The files list Social Security numbers because government agencies use them as identifiers.