The Ability to Validate New Social Security Numbers

The Ability to Validate New Social Security Numbers Will Change on June 25, 2011 • Why will this become important to preemployment screening? • How should employers and employment screeners prepare? Presented 06/23/2011 by John Beaudette

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Questions and Answers q How has traditional SSN enumeration been working? q What is Social Security Number Randomization? q Why is the Social Security Administration changing it? q What does this mean to the SSN Trace? q What is a Consent-Based Social Security Number Verification (CBSV)? q What are “Consumer Profile Numbers” and how can this hurt the integrity of the standard SSN Trace. q Looking ahead, what methods are best to verify SSN’s?

Current Social Security Number Issuance Guidelines Ø First three numbers of the SSN, called the area number, denote the state of issue (based on zip code used on SSN application) Ø Middle two numbers, called the group number, indicate approximately when the SSN was used. Ø Last four numbers are called serial numbers, issued consecutively. v Based on the Social Security Administration’s current SSN assignment and historical issuance data, one can determine: 1. if an SSN has been issued, has yet to be issued, or 2. if the number has been retired to the SSN Death Index. 3. if issued, indicates when/where This is called: Social Security Number Validation § does not verify Name-SSN Match through SSA master files.

The ESS “SSN Trace” SSN Validation + Name/Address History = SSN Trace Ø The source of the Name/Address History that is been linked to a given SSN is through multiple commercial databases, primarily header information from the three credit bureaus. Ø Ideally, only the holder of the SSN appears as the commercial User of the SSN What exactly changes on July 25, 2011?

Social Security Number Randomization “SSN Randomization” means beginning June 25, 2011, the newly issued SSN’s will no longer follow any geographical or chronological pattern. ü No longer know the state of issue ü No longer know when it was issued ü Previously unassigned numbers (000, 666, 900, 999) will be assigned Randomization will allow the SSA to: 1. Extend the longevity of the nine-digit SSN. 2. Help protect the “integrity” of the SSN. How will this affect ESS’s SSN Trace?

SSN Traces After June 25, 2011…. 1. The standard SSN Trace doesn’t change for SSN’s issued before 06/25/2011. 2. Most non-immigrants are issued SSN’s at birth, deferring the impact of the SSN Randomization for many years (for the most part). Ø Ø Legal immigrants are issued new SSN’s Domestic violence victims, and ID theft victims can also be issued a new SSN. 3. If the SSN validation shows the SSN Number is invalid, ESS will report the SSN is either invalid or issued after 06/25/11. 4. Name and Address History linked to an individual’s SSN through credit/commercial activity – unaffected. There is a way to know with certainty on a pre-hire background check whether an applicant’s name, date of birth, and SSN match with the Social Security Administration’s Master File

The SSN “integrity” Issue: AAA = area number, block of numbers to represent state of issue GG = group number, assign per established guideline SSSS = serial number, issued consecutively • A Carnegie Mellon University 2009 report shows the relative ease of predicting a valid SSN. Synthetic Name Fraud or “piggy-backing” occurs when one blends his own name, date of birth, and address with another person’s SSN. The number is used to establish a new credit file, obtain credit cards, rent property, apartment, hide other negative information that is linked to the real SSN. After 1989, about 96% of SSN’s are Enumerated at Birth (EAB) -- created a huge pool of valid but dormant SSN’s. ID thieves find valid, but unused SSN’s so there is less chance of detection or at least there is delayed detection.

Making the Headlines By BILL DRAPER Associated Press Writer, KANSAS CITY, Mo. August 2, 2010 (AP) New ID theft targets kids' Social Security numbers, could threaten credit system “Thieves are targeting your kid's number long before the little one even has a bank account. Hundreds of online businesses are using computers to find dormant Social Security numbers - usually those assigned to children who don't use them - then selling those numbers. ” Source: http: //abcnews. go. com/Business/wire. Story? id=11305930

ID Theft Against Minors – may just be the tip of the iceberg • FTC reports over ten million more credit profiles than there are consumers, and • 500, 000 people under the age of 18 are victim of ID theft every year. • ID Analytics says that over 40 million SSN’s are associated with multiple people Ø The stolen SSN’s have been marketed by ID thieves as Credit Profile Numbers or CPN’s. They market them as if they were a legitimate service. Ads have been found on Craigs List, You. Tube, other web sites. Ø Examples: www. legalcpn. com www. mycpn. webs. com

If you suspect your child’s identifiers have been compromised, or you just want to check. . . Trans. Union • Call the TU Consumer Relations Department at 1 -800 -9168800 or fill out the Child Identity Theft Inquiry at http: //www. transunion. com/corporate/personal/fraud. Identity. Theft/fraud. Prevention/chil d. Id. Theft. page • TU Fraud Victim Assistance Department 1 -800 -680 -7289 or go to http: //www. transunion. com/corporate/personal/fraud. Identity. Theft/recovering. Fraud/ab out. FVAD. page Equifax: www. equifax. com Experian: www. experian. com

Traditional SSN Trace Faces Challenges from both SSN Randomization and CPN Pollution As more time passes subsequent to 06/25/2011, more immigrant applicants with valid SSN’s will hit the job market. Ø When these are run through the historical SSN issuance data, they will show as “invalid. ” As more CPN’s are issued, employment screening services will have more difficulty discerning the rightful user of a SSN. Ø There will be more cases where the Name/Address history, which primary comes from credit bureau databases will show multiple names. Ø For non-immigrants who present themselves with authentic looking I-9 documentation – how does one know for sure they are not undocumented workers who purchased a CPN and created false documents. v One option is to take advantage of the Social Security Administration’s “Consent-Based Social Security Number Verification” (CBSV)

Consent-Based Social Security Number Verification (or CBSV) About CBSV Use: • Launched by Social Security Administration in Nov 2008 • Requires written authorization on form SSA – 89. Currently, electronic signatures not accepted. • $15 ESS fee • Does not replace value of the SSN Trace CBSV Benefits include: • 100% accurate verification of your applicant’s name, date of birth, and SSN with the SSA Master files • Okay for pre-hire use, or any business use (SSNVS, E-verify, I 9 docs cannot) • Strongly supports the FTC’s Red Flag Rules, which requires a written program to detect, prevent, and mitigate ID Theft • Same day turnaround

CBSV “No-Match” 1. ESS Verifies data was input correctly 2. If data was input correctly, then the applicant/SSN holder is contacted to determine accuracy of the personal identifiers submitted – needs to match exactly with SSA records – name, SSN, and DOB. 3. If all data elements are correct, then applicant/SSN holder must correct the issue at the local SSA Field Office 4. The search is re-run with the correct data

SSN Verification Options Social Security Number Verification Service (SSNVS) Ø Ø Ø Post hire use only Wage-reporting use only Free after registration On-line or over phone (TNEV – Telephone Number Employment Verification), same day Confirms that Name and SSN mach, but not DOB E-Verify Ø Ø Post hire use only, within three days of hire, accompanies the I-9 documentation Combines SSA and DHS information for Work Eligibility Verification Free after registration and training On-line, same day Consent-Based Social Security Number Verification (CBSV) Ø Ø May use pre-hire or anytime and not just for employment purposes $5000 set-up fee plus transaction fee -- $15 per check with ESS On-line, same day Confirms accuracy of all personal identifiers – essential for integrity of criminal searches

Thank You! Go to www. essclientservices. com to get : § § SSA-89, the CBSV consent form Recording and Screens of the webinar Questions? 1 -800 -473 -7778 John Beaudette johnb@employscreen. com