From Bloomburg:
Banks fighting the fastest-growing financial crime in the U.S. have found an unlikely ally: the Social Security Administration.
Banks have spent years lobbying Congress for better access to the agency’s data as a way to fight costly forms of identity theft. Now, the agency has invited lenders and other firms to join a planned real-time electronic system for verifying that credit applicants’ names match their Social Security numbers.
The system would help banks eliminate sham identities created when fraudsters apply for credit cards using Social Security numbers that aren’t in use. Known as synthetic identity fraud, it is the fastest-growing financial crime in the U.S., according to a report this month by the Federal Reserve. U.S. lenders lost $6 billion from this type of fraud in 2016, according to consultant Auriemma Group. ...
The Social Security Administration has long required handwritten consent from consumers to allow lenders to confirm identities. Under that system, banks pay a one-time $5,000 enrollment charge plus a fee every time they look up someone. ...
That is good, on the surface. But would the banks reveal that you are on SSDI? Perhaps I do not want any bank knowing that.....
ReplyDelete@10:11
ReplyDeleteAs I understand it, SSA is just intending to encourage banks to verify a credit card applicant's name and social security number with SSA. The applicant would necessarily have to have given that information to the bank, and SSA already has that information, so there shouldn't be a privacy concern with the bank contacting SSA to confirm both of them have the same info. I suppose the only exchange of new information would be that SSA would become aware an individual is applying for credit, so theoretically that's a privacy concern, but it is pretty minor. I'm not aware of how an application for credit would impact any eligibility for benefits, and assuming the bank discloses to applicants they are going to verify the applicants information with SSA, I see no issue with it.
https://www.bankingdive.com/news/social-security-verification-system-curb-id-theft/559059/
ReplyDeleteSays that the change is due to a law and that the subscribers have to put up 50% of the costs to establish it before it will be built. Interesting funding model.
@8:41
ReplyDeleteThat is pretty odd, not in a bad way though. Sortof like a public-private partnership but actually requiring some investment on the private end of things. Makes sense. It is in the bank's interest to prevent fraud too.