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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Social Security Numbers Overused by Banks

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It's understandable that banks and credit unions need our social security numbers when we open accounts. They need to report interest that we earn to the IRS. Unfortunately, many banks have overused the social security number, and that has increased the risk of identity theft. This issue is described in this New York Times Bucks blog article which has a review of a report from Javelin Strategy & Research:

The firm’s annual Banking Identity Safety Scorecard looked at the consumer-security practices of 25 large banks and credit unions. It found that far too many still rely on customers’ Social Security numbers for authentication purposes

One thing that angers me is when a bank or credit union requires social security numbers of beneficiaries that I want to include on my bank accounts. I know readers who have also had this problem.

As I described last week, specifying beneficiaries on bank accounts is an easy way to keep money out of probate. Most banks allow you to add one or more beneficiaries to an account. They typically label beneficiaries as "payable on death" (POD) or "in trust for" (ITF). Many banks only require that you specify the beneficiary names or a few other details like birth date or address.

One of my credit unions refused to add a beneficiary without the beneficiary's social security number. I was wanting to add my brothers as the beneficiaries, but I didn't want to carry their social security numbers. Also, I didn't want to disclose these numbers. I trust the credit union, but nothing is 100% secure. The more you give out these numbers, the more likely it could be found by hackers, and I don't want to be responsible for causing an identity theft issue for my brothers. I can understand that beneficiaries may need to provide their social security numbers if they claim the bank accounts.

Have you experienced banks or credit unions overusing social security numbers?


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Comments
23 comments.
Comment #1 by Anonymous posted on
Anonymous
RECENTLY I RECEIVED IN THE MAIL A FORM THAT REQUESTED ME TO WRITE IN MY SOCIAL SECURITY NUMBER AND MAIL BACK TO REGIONS BANK FOR VERIFICATION.  I CALLED REGIONS AND TOLD THEM I WAS NOT GOING TO DO THIS BECAUSE I HAVE NEVER HAD AN ACCOUNT WITH THEM.  MY ASSUMPTION IS THAT THEIR COMPUTERIZED MALFUNCTION SYSTEM WAS SENDING OUT MAILINGS REQUESTING SOCIAL SECURITY NUMBERS FOR NONACCOUNT HOLDERS.

1
Comment #2 by me1004 posted on
me1004
Anonymous #1: sounds like you have a postal mailed version of a Phishing e-mail! I very much doubt that a bank where you didn't even have an account sent you that.

As for SS number use at banks, this issue is NOT unique to banks! I find it with businesses across the board.

As for some banks requiring you provide the SS number of beneficiaries, I have had that problem too. I think they don't even understand what they are doing, think the Feds require it like they do of the account holder - -and this always scares me to think they don't even have a clue what they are doing. Anyway, it is not at all reasonable as the account holder does not necessarily have access to someone else's SS number!

To make that point clear when I run into this problem, I tell the clerk that I want to name them as my beneficiary, so would they please tell me their SS number so I can list it! There is no reason why you should just simply have ANYONE else's SS number, not even a relative's. You do not need someone's SS number to make them your beneficiary -- they don't even need to have a SS number to be your beneficiary. Geez, they could be 2 years old, or for any number of other reasons never had gotten an SS number! In my case, I like to name my niece and nephew as my beneficiary, but I don't have their SS numbers and can't have them. I can't even ask, not that I would, because I do not want them to even know I am listing them as beneficiary -- I do not want it changing what they do in life (I have it noted at home on my accounts, so if I die, it would be seen and known then so they could claim it). It is not necessary to inform anyone that they are your beneficiary. 

 

10
Comment #3 by Anonymous posted on
Anonymous
not just credit union, some banks also require you putting SSN for your beneficiaries. They will not accept any beneficiary without a SSN.

3
Comment #4 by Anonymous posted on
Anonymous
IN REPLY TO COMMENT #2:

I SUPPOSE REGIONS BANK IS THE FISH.  THE SELF ADDRESSED ENVELOPE PROVIDED WAS REGIONS BANK'S ACTUAL ADDRESS.

1
Comment #5 by Anonymous posted on
Anonymous
It just happened to me today.  I tried to add a beneficiary to my Velocity Credit Union CD.  They required the SS#.  I offered to give them the name, birthdate and last four digits of the SS#, thinking that that should be sufficient for proper identification.  However, I was told that without the full SS# the beneficiary could not be added.  Makes no sense. 

3
Comment #6 by me1004 posted on
me1004
As for the SS number for beneficiaries, I tell the banks that that will be a deal breaker, I will not open any account with them if they insist on requiring that. And that is how I act, do not open any account with them if they won't yield -- because to open one with them would mean I can't have my beneficiaries on it. 

I will add, too many times I have had them say the federal government requires it because it requires they get the SS number of all account holders. I have to try to explain to these people that a beneficiary is not an account holder. They don't even understand -- even when you go up the ranks. They have no idea what they are doing, and that is really scary.

 

6
Comment #7 by JIM (anonymous) posted on
JIM
The Best Part Of All ,If You Pay Tax Estimates That Information is Required To Be Put On Your Check,Which Is Than Copied And Put On The Banks Website, So That You Can Get A Copy Online...WHAT EVER HAPPENED TO THE SOCIAL SECURITY ACT ???? You Cant Even Have Some Medical Tests Preformed Without Providing That Information.......

3
Comment #8 by Anonymous posted on
Anonymous
HERE'S A GOOD ONE -- a friend of mine who has worked for several universities tells us that if you join an alumni organization BEWARE!  The colleges and universities routinely identify alumni (and current students) by their SSN's.  So your SSN is everywhere on the college computer system, and that also goes for members of the alumni organizations.  May not be available to the public, but certainly available to computer nerds on campus, ETC ETC!!!  I'm 54 and don't want my SSN on the college computer system in any way -- according to my friend, being in an alumni org., IT IS!

5
Comment #9 by scottj posted on
scottj
 I already figure my SS# is out there and could easily be in the wrong hands, that is why I have a credit freeze. So I don't really care about giving out mine, but yea I don't want to give out family members. Is a lot simplier now that I open all accounts in my formal trust. Beneficiaries are in there without SS#, Also after having a long talk with an FDIC employee about additional FDIC coverage on trusts accounts I learned a lot. If your bank fails and you have it in a trust the FDIC will review the trust and determine your coverage. Is also helpful when a bank does not allow more than one listed beneficiary. 

3
Comment #24 by mo (anonymous) posted on
mo
A credit freeze might prevent credit being issued but what if someone uses your SSN to come after your bank account or retirement account?

1
Comment #10 by Anonymous posted on
Anonymous
As a follow-up to my earlier message regarding Velocity Credit Union.....I just received a phone call from their main office telling me that they WOULD add my beneficiary without requiring the SS#.  Therefore, it pays to resist.  I had originally refused to give more than the last four digits to an account person and it was kicked higher to someone apparently able to make a deviation to their normal practice.

6
Comment #11 by CraigPD posted on
CraigPD
"I just received a phone call from Velocity Credit Union telling me that they WOULD add my beneficiary without requiring the SS#.  Therefore, it pays to resist."

I think it's also a matter of VCU being a responsive and reasonable operation.  I doubt you would have resolved this issue as expeditiously with many other institutions.

3
Comment #12 by Non Stop Traffic Formula (anonymous) posted on
Non Stop Traffic Formula
looking forward to your blog

thanks for sharing

1
Comment #13 by I hate Fort knox CU (anonymous) posted on
I hate Fort knox CU
Another tactic I use is to have a 'second' ssn that I use for dumb requests for ssn, i.e., those requests outside the law that some dumba55 corporation makes up.  I change the numbers a little, making 7 into 2 or vice versa. Obviously, a 'typo' error!  So the arguing beaurocrat employee now has something to put down in their leaky computer to identify me. 

I just did this today at my local city water department!

2
Comment #14 by me1004 posted on
me1004
I hate Fort Knox CU: If you do that for a beneficiary, the beneficiary will have MAJOR problems trying to collect when the time comes. Bad idea for this situation.

3
Comment #15 by I hate Fort Knox CU (anonymous) posted on
I hate Fort Knox CU
Notice that i said that i only do this for non-bank stuff!

2
Comment #16 by Anonymous posted on
Anonymous
I hate Fort Knox CU :  Great idea.  I also do that when it is improperly insisted that I give my 1) phone number or 2) credit card number -- "just for our records"  or 3) e-mail address.  Insisting on an e-mail address is a new thing.

2
Comment #17 by Cyclone (anonymous) posted on
Cyclone
When they ask for mine in non-banking situations, I always refuse and move on. My electric utility, water company, cell phone provider, and home Internet provider didn't balk and proceeded with providing me the service without.

For banking situations, I have only once been asked to provide the SSN of the beneficiary. I simply said she doesn't have one. There are many, many people without social security numbers and many account holders without social security numbers. They proceeded without issue.

2
Comment #18 by Anonymous posted on
Anonymous
My pet peeve is now practically ALL the banks ask "for security purposes, what is the last four digits of your SSN?" And even some written correspondence would show those last four digits. Well, what kind of security is that if now those numbers are out there in cyberspace? Four digits are much easier to hack than nine digits! Secondly, I always wonder: all those CSRs (including all those out-sourced ones) have your SSN and what is to prevent one of them from commiting fraud? Just call me paranoid, but not really.

3
Comment #25 by mo (anonymous) posted on
mo
Valid points.  Say you are required to get a background check for an apartment lease or prior to starting a job - how long does your SSN stay in the backround check company's computer system?  Likely for the rest of your life, so you can have an id-theft problem presently or years from now, or both!

1
Comment #19 by Apache posted on
Apache
Let's get realistic about the SS for beneficiaries.  How will they be able to prove the person who goes in and says they are "**** Dumbwatt" beneficiary on a CD unless they can show proof by showing their SS is the same as is on the account.  Any one can find ways to get a false ID showing they are "****" but the SS is stronger proof.  This is why I am not concerned about giving it to my institutions as long as I feel the institution, itself, is reputable.  Just my opinion.

1
Comment #20 by Anonymous posted on
Anonymous
I, too, dislike giving my SS# to every CSR I speak with.  On the occasions when I've been asked for only the last 4 digits, I've asked the CSRs if they have the full SS# in the computers in front of them, and the answer has always been yes.  They also have address, birth date, often a password, etc.  Let's hope those thousands of CSRs at the many financial institutions are all honest. I doubt that they go through much of a security clearance when hired.

 

2
Comment #21 by luv fort knox cu (anonymous) posted on
luv  fort knox cu
ss number is 076 44 3002 wh ocares

1
Comment #22 by garion posted on
garion
I had a Blockbuster Video near me that insisted to open an account they needed my ss#. That was years ago and somewhat recently. I could've given them a false one but it wasn't that important to rent videos. And then when I went back  a few years ago Netflix was in full swing and I knew their days were numbered.

1
Comment #23 by lock out alert (anonymous) posted on
lock out alert
i signed up for the program so if they steal my ss number a million bucks is comming my way so i agree with 21

1
Comment #26 by mo (anonymous) posted on
mo
Maybe, but are you sure that the insurance doesn't just pay for your costs incurred in fixing the id-theft problem - up to $1mil.  Further, id-theft protection company gets haked, it's not likely that they have a $1mil for each of their, say 1mil, clients. 

1