Social Security Files Barred in Credit Checks

Commissioner Dorcas R. Hardy moved Thursday to bar credit bureaus and banks from using Social Security’s massive data files to verify Social Security numbers for commercial purposes.

“I have decided after consulting with the policy council and office of general counsel to halt providing negative verifications of Social Security numbers to financial and credit institutions,” Hardy said.

She said her order would bar the Social Security Administration from processing magnetic tapes containing 140 million names and Social Security numbers submitted by TRW Credit Data, whose operations include gathering information for credit purposes, to determine which names have incorrect Social Security numbers.

Sen. David Pryor (D-Ark.), who raised the issue with Hardy on Monday at a hearing of the Senate Committee on Aging, said: “I am glad that Commissioner Hardy has taken this path and has seen fit to preserve the confidentiality of the Social Security files.

“Unfortunately, this action comes too late to protect some 150,000 people whose files were violated during a test run conducted for TRW (in 1987) and for more than 3 million people on whom verifications were conducted for Citibank and other firms in past years.” Pryor said he had been “appalled that officials had been so cavalier about the privacy of American citizens.”

In a letter to Louis W. Sullivan, secretary of health and human services, Pryor asked for an investigation by the agency inspector general. Pryor called the TRW and Citicorp verifications “the largest breach of privacy in the history of the program.” He called the verifications violations of the Privacy Act of 1974.

After Hardy learned about the practice, she said, she decided in December to delay approving the TRW request for verification of 140 million names and Social Security numbers. She said she asked the policy council to review the issue.

Hardy said it was clear that verifying Social Security numbers for credit bureaus and financial institutions is impermissible. However, she said the agency will continue to verify numbers for employers who need the information to be sure that Social Security deductions for their employees are properly recorded and to be certain that a job applicant is using a valid Social Security card.