Social Security Number Privacy Laws

The Social Security number has become an unofficial national identifier, although its disclosure is required in only limited instances.pen over credit card image by PaulPaladin from Fotolia.com

Each year, 8 million to 9 million Americans become victims of identity theft. The Social Security Number (SSN) has become a widespread identifier in all matters public or private, and is used in a great many different contexts, including employee files, medical records, insurance policies, credit and banking accounts. Unfortunately, this makes it very desirable for identity thieves, who use Social Security numbers to gain access to and exploit private information.

Government Agencies

You may have to give your SSN to certain government agencies--for instance, tax agencies, welfare offices and state departments of motor vehicles. Laws have been enacted, however, to protect citizens. For example, the Privacy Act of 1974 requires that all government agencies--federal, state or local--that request SSNs provide a disclosure statement. The statement should explain whether the SSN is required or optional and how it will be used. If an agency refuses to grant you a disclosure statement, you should contravene by citing the Privacy Act of 1974.

Generally, you are not legally obligated to provide your Social Security number to most businesses, except in the case of financial transactions covered under anti-terrorism legislation and transactions that require IRS notification. However, some companies might refuse to do business with you if you don’t provide your SSN. As of July 2010, no law prevents businesses from asking for your number and few regulate what a business can do with it. Never divulge your SSN during a business transaction unless it is absolutely necessary.

Insurance companies and credit card issuers usually request SSNs on applications for their services. For instance, administrators of government health care programs such as Medicaid and Medicare sometimes request a Social Security number. Private insurers are not legally allowed to ask for a Social Security number. Still, they might refuse to issue a policy if you don’t provide it. Under a 2007 federal law, however, group health plans covering 20 or more members are required to provide SSNs of Medicare-eligible members and their dependents to help sort out coverage responsibilities.

You may not intentionally display any individual’s SSN on a website in such a way that is accessible to the general public. However, you are bound to encounter websites that ask for your SSN (for example, if you apply for a credit card online). Conduct business transactions online only with respectable companies that you know you can trust. Most trustworthy online companies displaythe padlock symbol at the bottom of their site. Install the latest antivirus and spyware software on your computer for added safety.

Some states used to use SSNs as ID numbers on driver's licenses. This is now prohibited by federal law, and anyone holding such a driver’s license is encouraged to request a replacement that uses an alternate number. Similarly, some universities use SSNs on ID cards, though federal law requires a disclosure statement telling students how the SSN is used. As of July 2010, however, at least seven states have prohibited this practice. California and New York have also acted to restrict private businesses' display of SSNs on identification such as insurance cards.