I began studying the identity theft problem in 2007, when I started this blog. From time to time, I've wondered what would happen if two people use the same Social Security Number. The second user could be an identity thief or an illegal immigrant trying to secure a job. In his Red Tape Chronicles blog, Bob Sullivan described what happens:
"... Holli knew something was wrong when she pulled up the statement from her new 401(k) account and saw a stranger's name there. Under her name and account information, she found a second name: Paulino Rodriguez. But was it an accident, random vandalism or a serious crime?"
Holli lived in Fountain Valey, California. Rodriguez lived with his family in Escondido, California. Rodriguez was a restaurant worker in an Escondido Burger King and an illegal immigrant. Married with four children, Rodriguez had used Holli's Social Security number for about three years.
Sullivan clearly stated a situation few people realize:
"Across America, perhaps millions of U.S. citizens are sharing their identities with undocumented workers who are virtually hiding behind Social Security numbers like Rodriguez. The data on the subject are incomplete, but each year nearly 10 million workers pay their taxes using the wrong Social Security number. While this can happen for a variety of reasons, most often it involves restaurant and farm workers, suggesting many of those 10 million workers are employees who are using someone else's SSN to satisfy federal employment requirements."
Upon learning that another person was using her Social Security number, Holli did what any of us would do. First, she panicked. With her Social Security number, an identity thief could easily wreck her credit and finances. Then, she took action:
"She called his employer, Reddy Restaurants Inc., which supplies workers to Burger King. Holli says she was told that nothing could be done because Rodriguez fulfilled the requirements for employment when he started work -- namely, he supplied what appeared to be a valid Social Security card. Mike Holly, owner of Reddy, confirmed that Rodriguez was an employee but refused to otherwise discuss the situation. Holli then called the local police, who took a report but said nothing could be done. She contacted the Social Security Administration, the Federal Trade Commission, even her 401(k) administrator. The message she heard from each was the same: We can’t help you."
The response by Reddy Restaurants sounded like bulls---; an attempt to avoid responsibility since the company probably doesn't perform adequate background checks of new employees. The company should have taken action and fired Rodriguez once they learned that he had used a valid Social Security Number fraudulently. Holli also contacted an attorney, who said that since her credit hadn't been affected, there wasn't anything he could do for her.
The issue is not how Rodriguez obtained Holli's Social Security number. There are two key issues:
- A company tried to avoid responsibility for poor background checks, and
- A government and law enforcement seemed unable or unwilling to correct a situation that clearly needed correction
The unspoken secret: our government just may be happy with the current situation, because more people are paying taxes to local governments and into the Social Security system.
Holli persisted. She got her local police department to finally take a report, which was forwarded to the Escondido police department. She finally got the attention of a detective in the Escondido police department. A taxpayer should not have to work this long and this hard to get help from law enforcement. The Escondido police department finally staked out Rodriguez's home in May and when he arrived, arrested him since he had (allegedly) falsified his Social Security card and work visa.
Holli's story has implications for all of us:
"Since new employment rules took effect in 1983, U.S. workers must supply documentation to prove they are eligible to work; nearly always, a Social Security number is used. While employers can call the Social Security Administration to perform limited verification of the information, that's seldom done. So it's possible -- in fact common -- that employees’ names and numbers don't match."
What happens when Social Security numbers and names don't match?
"... no one gets credit for the taxes paid by the worker. The money simply ends up in the U.S. Treasury. Since 1983, more than $500 billion in uncredited Social Security wages have been earned by so-called "no match" employees like Rodriguez."
This unspoken financial benefit seems to explain why government agencies are slow to act on ID-theft reports. While Rodriguez was probably trying to find work and feed his family, the bottom line is that he used a valid Social Security number fraudulently to obtain work. He was working in the USA illegally.
The more important and truly frightening implications:
"When another person is using a consumers' Social Security Number for employment purposes only, there is almost no way to discover the identity theft. The misuse will not show up on a credit report; it won't be detected by credit monitoring. Because the wages earned are not credited to the victim, they won't show up on annual Social Security statements either. In fact, there is no way for anyone to inspect the history of their Social Security Number, or to find out where and when it's been used. Only an anomaly or coincidence – such as having an imposter show up on a 401(k) Web site -- betrays the theft."
This is alarming. I always thought that reviewing my Social Security Statement every year was sufficient protection. Apparently, not.
I believe that there is a way to discover people who fraudulently use valid Social Security numbers. It means forcing companies to consistently perform thorough background checks on new employees. That's the price for identity security.
Meanwhile, the current situation means that most (or all) of the identity and credit monitoring services advertised are somewhat of a sham. These services cannot truly discover a critical form of identity theft: another person fraudulently uses your valid Social Security number for employment. Yes, you read that correctly. With today's situation, there is no way for consumers to discover another person using their Social Security number for employment. That means, there is no way of knowing if your identity is secure.
If you find Holli's story and its implications troublesome (and I sincerely hope you find it troublesome), I encourage you to write to your elected officials and demand action.