Misuse of Social Security Numbers Widespread

5/9/00 7:02:15 AM

By William M. Welch

Fraudulent uses of Social Security numbers are soaring, and the government is unequipped to investigate most of the cases, two federal watchdog agencies will report to Congress today.

Theft of Social Security numbers has been spurred by the explosion in electronic data collection and commerce, which has provided easy access to people's numbers and other identification information, the reports say.

Criminals often use stolen numbers to make credit purchases and walk away from the bills. Their victims are left with credit records that can take years to repair.

More than 60,000 allegations of misuse of Social Security numbers were reported to the Social Security Administration (SSA) in 1999, James Huse, the agency's inspector general, says in testimony prepared for a House hearing.

More than half the cases affect the Social Security system directly, such as fraudulent filing for benefits and misreporting of wages and payroll withholdings. Allegations of fraud that hurt the Social Security program skyrocketed last year to 30,115 cases, up from 10,915 cases the previous year.

Huse says many other cases, particularly those in which criminals use bogus numbers to conduct private transactions, are not investigated by the SSA.

Social Security fraud is booming because of the widespread reliance on Social Security numbers by government agencies and private businesses, officials say.

In one case, the inspector general cites, a Milwaukee man used a stolen number to get a job, obtain a state ID card, open bank accounts and file fraudulent tax returns. The man stole $80,000 in computers from his employer, the Wisconsin Supreme Court, all while continuing to receive Social Security benefits by claiming he was disabled and unemployed.

The inspector general recommends:

* Halting the mailing of Social Security cards to post office boxes.

* Requiring the SSA to obtain independent verification when non-citizens seek Social Security cards.

* Stiffening fines for sale or misuse of Social Security numbers.

* Requiring photo IDs when people deal with the SSA.

While fraudulent use of Social Security numbers is illegal, the General Accounting Office says no federal law imposes broad restrictions on their use by businesses or state and local governments.

The investigations were sought by Rep. Clay Shaw, R-Fla., chairman of the House Ways and Means subcommittee on Social Security, which opens two days of hearings today on the issue.

Shaw said his ire was raised over ''frivolous use'' of Social Security numbers when he was asked for his by a clerk at a video rental store near his vacation home in North Carolina. He refused to give it and left without the videotape.