How Banks Are Aiding And Abetting Identity Theft

To an identity thief, somebody else’s Social Security number is money in the bank. These nine digits unlock a world of phony credit and create a huge hassle for the poor person who actually holds that number. “The SSN remains the key that opens your life,” says Ed Mierzwinski, consumer advocate at U.S.-PIRG. “It’s the easiest way for a bad guy to pretend to be you.” So why are banks still using SSNs as a major form of customer identification?

According to a recent study by Javelin Strategy & Research, 70 percent of the biggest credit card issuers in the U.S. use them in at least some cases as a way to verify a customer’s identity when he or she contacts the company. “It’s easy and they haven’t changed their systems,” says Phil Blanks, the study’s author and head security and risk analyst at Javelin. “My guess is they’d tell you they’ve done it this way for years.” Plus, financial institutions collect your Social Security number when you fill out a credit card application (or open a bank account), so they already have the numbers on hand.

In a pre-PC era, using SSNs might not have been such a risk....

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