Schumer Announces Push for New ‘Bill of Rights’ for Victims of Social Security Identity Theft

The Same Types of Protections & Remedies That Are In Place for Stolen Credit Cards Are Not in Place for Stolen SSNs

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Washington, DC - September 18, 2014 - Today, on a conference call with reporters, U.S. Senator Charles E. Schumer announced his push for a new Social Security Identity Theft Bill of Rights that would give individuals, including seniors, new protections to guard against Social Security Number and Social Security benefits theft and new ways to address any such theft in a timely manner. Schumer said that hundreds of thousands of New Yorkers are victims of identity theft each year, and often the main target of these identity thefts is an individual’s Social Security Number (SSN). SSNs are the most valuable piece of information for identity thieves, because having this information helps them capitalize even more on a stolen credit card or bank account number. In addition, with a stolen SSN, identity thieves can open a new credit card, commit tax fraud, use a person’s health insurance or even steal someone’s Social Security benefits. With identity theft and data breaches on the rise, and identity thieves particularly focused on securing SSNs, Schumer said he is pushing new bi-partisan legislation that will create new remedies and protections for SSN theft and Social Security benefit theft. Schumer’s proposal would give victims of identity theft the ability to pursue damages against identity thieves, give victims a single point of contact within the Social Security Administration to remedy the identity theft, and set up new electronic notifications to alert individuals when their accounts have been altered, which is often a sign of fraud.
“Hundreds of thousands of New Yorkers are victims of identity theft each year, and for these noxious thieves snatching your Social Security information is the ultimate score. Gaining access to a person’s social security number is like the Swiss Army Knife of identity theft – you can use it in several different ways: to commit tax fraud; steal money; even access someone’s Social Security benefits,” said Schumer. “Even though Social Security Numbers have increasingly become the target of identity thieves, the remedies we have in place in the federal government to help seniors, and others, recover from a stolen Social Security Number, and the protections we have in place to help them avoid it, are not up to snuff. It’s time the Social Security Administration and the federal government made it easier for individuals to recognize attempted fraud and protect themselves – and it’s time the government made the punishments for this type of theft more severe.”
“AARP commends Senator Schumer for his efforts to protect New Yorkers’ hard earned Social Security benefits from fraud and ID theft,” said Beth Finkel, State Director for AARP in New York. “Social Security makes up the lion’s share of retirement income for most older New Yorkers, and older Americans, and protecting that money from the grips of fraudsters and con-artists is crucial to financial security.”
Laura Palmer, Acting Associate State Director for Advocacy for AARP NY, joined Senator Schumer on the call on behalf of AARP.
Identity theft is a major problem throughout the United States, and one that is on the rise. According to a February 2014 report by the Federal Trade Commission, complaints of identity theft around the U.S. have risen by over 300% since 2001. Schumer said that as more people have become increasingly connected online, and as more digital records are being kept for longer periods of time, it has become easier and more attractive for thieves to steal personal information like a credit card numbers, bank account numbers, insurance information or medical records, which are all considered forms of identity theft. Schumer noted that recent data security breaches at Target and Home Depot illustrate how easy it can be for identity thieves to hack into major corporations or chains databases and steal personal identification en masse.
Schumer said that the most valuable piece of information for any would-be identity thief is an individual’s SSN, which unlike a credit card or bank account number, cannot be easily replaced and can be used to commit a number of different forms of identity theft. Most commonly, SSNs can be used to acquire additional personal information about an individual, open up new credit cards in his/her name, commit tax fraud, or even steal one’s Social Security benefits. According to the Social Security Administration (SSA), an individual whose SSN has been stolen often does not even know what has happened until he or she looks at their bank statement or their benefits fail to come in the mail. Schumer said that, even though hackers and other identity thieves are not always able to obtain SSNs as part of a data breach, SSNs are often the target of these breaches because of how valuable they are. Schumer noted a recent breach at Community Health Systems, a network of over 200 hospitals in 29 states, as an example of a situation where SSNs were targeted. In this breach, which was revealed last month, hackers were able to make off with approximately 4.5 million social security numbers. Recently, in Albany, a hospital nurse stole over 50 social security numbers with the intent of committing fraud.
According to Schumer, despite how valuable an SSN is, and despite how it has increasingly become the target of identity thieves, the federal protections in place to guard against SSN theft and the remedies available to address the situation have not kept pace with other forms of identity theft. Therefore, Schumer announced that he has introduced a bipartisan bill, the Improving Access to Social Security Services Act (S. 2742), which would modernize protections and create new deterrents against SSN identity theft. Schumer said that this legislation has three main tenets that will help Social Security beneficiaries and those who are victims of identity theft, which he called a Social Security Identity Theft Bill of Rights. The three main tenets are:
  • 1.  All Social Security Beneficiaries have the right to an immediate confirmation when their Social Security benefits information has been changed. Currently, beneficiaries are given confirmations of account changes, such as bank deposit information, by mail. This could take a few days to arrive, and if the beneficiary is not the one who made the change, it could be a clear indicator that one’s hard-earned Social Security Benefits are at risk. Schumer’s legislation would require fast electronic confirmations, which would help prevent identity thieves from getting a three- or four-day head-start.
  • 2. All Social Security Beneficiaries have the right to a single point of contact within the SSA who can help an individual remedy SSN fraud and benefit theft. Currently, if a senior calls the SSA to report a stolen SSN, he or she could get a different representative each time who is unfamiliar with the circumstances of that person’s case. Schumer’s legislation would institute a single point of contact, which would better help seniors and the disabled address SSN theft.
  • 3. Penalties for those who steal SSNs should be stronger and beneficiaries who have had their information stolen should be able to pursue damages. Also, current law is limited in penalizing the middlemen who steal and sell massive quantities of SSNs but don’t actually commit SSN fraud themselves. Schumer’s bill would allow a victim to pursue damages of up to three times the amount that was stolen and increase the penalties on those found guilty who have stolen SSNs with such frequency that it can be considered a business practice.
Schumer noted that credit cards and banks have many similar policies in place, and they work. For example, if an individual’s credit card is stolen or used to make a fraudulent charge, the credit card company notifies the individual immediately and a process to replace that card and prevent the transaction is almost immediately put in action. The same is true for debit cards and bank account information. The same types of protections are not in place, however, in the case of a SSN being stolen or a person’s Social Security account being tampered. Schumer said that when an elderly or disabled person falls victim to Social Security identity theft, an identity thief could gain access to the beneficiaries’ account, using the stolen SSN and other identifying data, and change some of the information in order to steal Social Security payments. Currently, Social Security beneficiaries are notified of changes to their account by mail, but these letters can take days to arrive. If changes are made by an identity thief, this confirmation letter would be a key indicator and spur the social security beneficiary to register that his or her SSN has been stolen. Schumer said, however, that by the time a confirmation letter arrives, identity thieves could have already run off with valuable information and potentially even a share of social security benefits. Therefore Schumer is proposing that the Social Security Administration (SSA) implement an electronic notification system so any account changes can be immediately confirmed.
Schumer noted that for people who do become victims of SSN identity theft, it can be very difficult to keep track of all of the different parties who need to be notified, particularly within the federal government. Schumer said that if a senior – or any other individual – has his or her SSN stolen, one of the first things he should do is call the SSA. Remedying the situation, however, can take many hours and a number of phone calls, and currently an individual reporting and dealing with Social Security identity theft may speak with a different SSA representative during each phone call. That is why Schumer is proposing the SSA adopt a single point of contact to help navigate all SSN identity theft and benefit fraud cases. Schumer said this single point of contact would not only be familiar with an individual’s case, but could also help an individual navigate other federal agencies who need to be notified of Social Security theft, such as the Federal Trade Commission (FTC). Since SSNs are not often replaced, Schumer noted that it is very possible victims of Social Security identity theft will need to maintain contact with SSA over a long period of time and having a single point of contact would be a great relief.
In addition, Schumer said that penalties for those who steal SSNs – particularly those who steal them en masse – fail to adequately protect SSNs or penalize SSN traffickers. Schumer’s proposal creates, for the first time, civil penalties that enable an aggrieved person to pursue damages against the criminal who caused them monetary loss in state court. If convicted, such a criminal could have to pay damages of up to three times the amount of money that was stolen as a result of a stolen SSN.
During the conference call, Schumer noted the approximate number of individuals in each region of New York State who fall victim to identity theft each year, and noted that many of these cases include instances of SSN theft. Based on a 2012 federal study conducted by the U.S. Department of Justice’s Bureau of Justice Statistics, it is estimated that approximately 563,029 people in Upstate New York experienced some form of identity theft, during 2012:
  • In the Capital Region, approximately 78,134 people experienced some form of identity theft.
  • In Central New York, approximately 70,425 people experienced some form of identity theft.
  • In the Rochester-Finger Lake Region, approximately 81,718 people experienced some form of identity theft.
  • In Western New York, approximately 90,188 people experienced some form of identity theft.
  • In the Southern Tier, approximately 51,123 people experienced some form of identity theft.
  • In the Hudson Valley, approximately 155,408 people experienced some form of identity theft.
  • In the North Country, approximately 36,033 people experienced some form of identity theft.
A full summary of Schumer’s bill, the Improving Access to Social Security Services Act (S.2742), which is co-sponsored by Senators Susan Collins (R-ME) and Bill Nelson (D-FL) Patty Murray (D-WA) and Mark Begich (D-AK) is included below:
This bill would address two major challenges facing the Social Security Administration:  1) Curbing Social Security Number identity theft and direct deposit fraud. 2) Accommodating the service needs of a ballooning retiree population.
Identity Theft
Equipped with your Social Security Number (SSN) and a few other pieces of personal identification information, criminals can steal from your bank account, create phony bank accounts, file taxes under and take your earned Social Security benefits.
Establish New Penalties for Distribution of SSNs for Profit and Online Scams: Current laws need to be updated to address the selling and display of SSNs online.
Proposal: 1) Imposes new civil penalties for knowingly and willingly selling, purchasing, or publicly displaying an individual’s SSN without informed consent. 2) Update federal law to create parity for SSN related scams committed in print publications and over the internet.
Provide an Automated Notice after Changes are made to Beneficiaries Accounts: Provide an automated notification system to alert beneficiaries of changes made to their direct deposit information in a timely manner with both an electronic and mailer notification. (OIG recommendation) –currently they send you a letter, but your money may be gone by the time your bank makes the transaction if a thief if the one making the changes to your account.
Single Point of Contact: SSA Commissioner would establish new procedures to ensure that any Social Security beneficiary whose benefits have been delayed or otherwise adversely affected due to identity theft has a single point of contact at the Administration throughout the processing of such beneficiary’s case. Such point of contact shall track the case of the beneficiary from start to finish and coordinate with other specialized units to resolve case issues as quickly as possible
Improving SSA services
Fees for Service: Retirees below the poverty line who rely on the SSA for vital services should not have to pay fees for these services. SSA currently charges $100 + for earnings statements that retirees need to plan out their retirement spending.
Proposal: In any case in which SSA assesses an individual fees for services, the SSA shall provide a waiver process and reduced fee schedule for individuals below the poverty line.
Live Chat Assistance: Many elderly and disabled beneficiaries need help setting up a MySSA account or navigating SSA’s online services.
Proposal: SSA shall provide live chat assistance for its web sites and must report to the Inspector General on said implementation progress, and other measures taken to alert user that assistance may be advisable.
SSN Printouts and Benefit Verification Forms: The SSA has not properly notified third parties or the public of its phase-out of these services or substitute services. This may adversely affect beneficiaries who need timely verification services to apply for a job, receive state or federal benefits or apply for a driver’s license.
Proposal: The SSA will be required to delay the phasing out of SSN Printouts and Benefit Verification Forms for one year (August 2015 and October 2015 respectively). SSA will extend outreach to employers, federal and state agencies and other third parties in areas where the demand for SSN Printouts and Benefit Verification Forms is high to raise the awareness that SSA offers online verification services and to notify third parties of a phase-out in services (OIG recommendation)
Field Office Service
The SSA’s current process of local service reduction lacks public input and transparency. This process is in dire need of reform. Social Security field offices across the country are experiencing increased wait times and insufficient staffing levels. A growing number of retirees and the disabled deserve efficient face-to-face help that their local SSA field office can provide to manage their earned benefits.
Proposal: To ensure local input in the field office closure process, the SSA will complete the following before a field office can be closed: 1) Distribute a public notice with relevant information to relevant stakeholders regarding the area serviced including demographic data, wait times and transportation/internet access constraints. 2) Hold at public comment period with at least 1 public hearing on the reasons for and the effects of an office closing on the local community. 3) After the public comment period and hearing, issue a public report addressing concerns of the local community.
To improve transparency the SSA will be required to: 1) Publish the most recent annual reviews of offices slated for closure. 2) Issue a report to Congress detailing the SSA’s official long-term strategic vision for local services, including recommendations for reforming its current filed office closure process.