GAO Criticizes CBSV

     From Social Security Administration: Actions Needed to Help Ensure Success of Electronic Verification Service, a report by the Government Accountability Office (GAO):

The Social Security Administration (SSA) launched the Electronic Consent Based Social Security Number Verification service in June 2020. The service seeks to reduce synthetic identity fraud, which combines fictitious and real information to fabricate an identity. The service allows authorized entities—generally financial institutions and their service providers—to verify an individual's name, Social Security number, and date of birth electronically. SSA spent about $62 million from fiscal year (FY) 2018 through FY 2023, based on SSA data. ...

SSA is required to fully recover the service's costs and collected about $25 million in user fees (40 percent of $62 million total costs) as of the end of FY 2023. SSA has not met its projections for fee collections due to lower-than-expected industry participation. SSA will need to collect about $14 million annually to meet its goal to recover all costs by the end of FY 2027, based on GAO's analysis (see figure). But it is unclear if SSA can meet its goal without increasing users or fees. Subscription data through December 2023 demonstrate that the service has not significantly increased users since enrollment opened in FY 2022, and fee collections decreased after SSA increased fees in July 2023.

 SSA officials told GAO they did not plan to take significant steps to increase use of the service. Industry participants GAO interviewed cited several factors limiting their use, such as difficult-to-interpret verification results. SSA also had not established performance measures and goals for the service's use and benefit. SSA could better ensure the service achieves its intended purpose of reducing synthetic identity fraud by developing strategies and assessing tradeoffs for expanding its use and establishing related performance measures and goals. ...

GAO is making seven recommendations to SSA, including that it implements appropriate controls over IT investments, updates cost estimation guidance, develops strategies to expand use of the service, and establishes related performance measures and goals. SSA concurred with all seven recommendations and stated that it will evaluate its policies and processes to determine how to address them. ...

    Note that the synthetic identity theft being discussed here isn't being directed at Social Security. It's directed at private financial institutions.

Complaints About Charges For SSN Verification

     From Federal News Network:

A federal service used by financial institutions to verify Social Security numbers, recently highlighted as a prime example for how the government could reduce improper payments and fraud, is at risk of a “death spiral” due to a steep increase in user fees, according to proponents of the system.

The Government Accountability Office is now conducting a review of the Social Security Administration’s electronic Consent Based Social Security Number Verification (eCBSV) program after lawmakers flagged concerns with cost overruns and price increases.

Meanwhile, it’s not clear whether eCBSV factors into a forthcoming SSA plan to make real-time Social Security number verification available to federal benefits programs. ...

When SSA launched eCBSV in 2020, SSA said it would charge new users a $3,693 administrative fee and returning users a $1,691 renewal fee. SSA also charged transaction fees, ranging from $400 for a user to submit up to 1,000 transactions, to $276,500 for users submitting between 200,000 and 50 million transactions.

Beginning in 2022, SSA eliminated the transaction fees, but began creating more tiers and increasing the transaction rates for high-volume users.

And as part of the most recent fee structure published in May, SSA raised the rates again for higher volume users. Those submitting between 15 million and 20 million cases will be subject to a $6.25 million annual fee; between 20 million and 25 million transactions will cost $7.25 million; and between 25 million and 75 million transactions will cost $8.25 million.

The new fee structure goes into effect in July.

The upshot, [Katie] Wechsler [of a group composed of banks, credit card companies and other large users of eCBSV] pointed out during last month’s hearing, is that a user submitting 20 million cases this year will pay 22 times what they were charged in 2021 for the same number of transactions. ...

Good Luck Getting Through On The Phone

     From the E-Verify website: 

Starting July 15, 2022, employees whose E-Verify cases are referred to SSA on or after July 15, 2022, will have the normal 8 federal working days to contact their local SSA office to begin resolving the mismatch. At the onset of the COVID-19 Pandemic in March 2020, E-Verify extended the timeframe for an employee to take action to resolve a Social Security (SSA) Tentative Nonconfirmation (mismatch). E-Verify cases referred on or after July 15, 2022, E-Verify will no longer provide extended timeframes for employees to visit SSA to resolve these mismatches. E-Verify cases referred between March 2, 2020 to July 14, 2022, with a SSA mismatch will still have an extended timeframe to be resolved ...

Now If They Could Do An Honest Recalculation Of The Attorney User Fee ...

     A notice from Social Security in today's Federal Register:

We provide fee-based Social Security number (SSN) verification services to enrolled private businesses and government agencies who obtain a valid, signed consent form from the Social Security number holder. ...

To use CBSV [Consent Based Social Security Number Verification], interested parties must pay a one-time non-refundable enrollment fee of $5,000. Currently, users also pay a fee of $3.10 per SSN verification transaction in advance of services. We agreed to calculate our costs periodically for providing CBSV services and adjust the fees as needed. ...

Based on the most recent cost analysis, we will adjust the fiscal year 2016 fee to $1.40 per SSN verification transaction. New customers will still be responsible for the one-time $5,000 enrollment fee.

The Price Is Going Up

    An announcement from the Social Security Administration in today's Federal Register:

We provide fee-based Social Security number (SSN) verification service to enrolled private businesses and government agencies who obtain a valid, signed consent form from the Social Security number holder. ...

To use [the verification service], interested parties must pay a one- time non-refundable enrollment fee of $5,000. Currently, users also pay a fee of $1.10 per SSN verification transaction in advance of services.... 

Based on the most recent cost analysis, we will adjust the fiscal year 2014 fee to $3.10 per SSN verification transaction. New customers will still be responsible for the one-time $5,000 enrollment fee.

I Agree With Cato On This One

     From a press release issued by the U.S. Citizenship and Immigrations Services (USCIS) division of the Department of Homeland Security:

U.S. Citizenship and Immigration Services (USCIS) Director Alejandro Mayorkas today announced an enhancement to the E-Verify program that will help combat identity fraud by identifying and deterring fraudulent use of Social Security numbers (SSNs) for employment eligibility verification.

This enhancement provides a critical safeguard to the E-Verify system by detecting and preventing potential fraudulent use of SSNs to gain work authorization. An employer, for example, may enter information into E-Verify that appears valid – such as a matching name, date of birth, and SSN – but was in fact stolen, borrowed or purchased from another individual. This new safeguard now enables USCIS to lock a SSN that appears to have been misused, protecting it from further potential misuse in E-Verify. ...

USCIS will use a combination of algorithms, detection reports and analysis to identify patterns of fraudulent SSN use and then lock the number in E-Verify. This will help deter and prevent fraudulent use of SSNs in the E-Verify system.

If an employee attempts to use a locked SSN, E-Verify will generate a “Tentative Nonconfirmation” (TNC). The employee receiving the TNC will have the opportunity to contest the finding at a local Social Security Administration (SSA) field office. If an SSA field officer confirms the employee’s identity correctly matches the SSN, the TNC will be converted to “Employment Authorized” status in E-Verify. Employees who successfully confirm their identities are encouraged to call USCIS so they can learn more about available resources on identity theft and fraud prevention.

    Alex Nowrasteh at the Cato Institute is concerned about this process:

The largest and most obvious problem is the Kafkaesque bureaucratic resolution process that could catch employees in an endless loop of lockdowns. To begin with, the onus for establishing a valid ID is placed on the user of the number as opposed to USCIS having to prove that the user is fraudulent. Mere identification by a USCIS algorithm shouldn’t prevent somebody from lawfully working.

Legitimate holders of Social Security numbers that are locked down are forced to go through the standard and long TNC resolution process to unlock their numbers, which in turn involves the use of state and federal issued documents to prove the applicant’s validity.

But these documents are dependent on Social Security numbers.  Driver’s licenses in most states, passports, and most of the other forms of government issued ID use Social Security numbers to establish the bearer’s validity. In essence, the holder of a suspect Social Security number is forced to use documentation derived from a number considered suspect by USCIS in order to prove identification to USCIS.  The government has not stated how it will resolve this conundrum or even if it has considered it. 

4.1% Error Rate In Numident

     From a recent report by Social Security's Office of Inspector General (OIG)(footnotes omitted):

Since 1936, SSA has assigned over 471 million Social Security numbers (SSN) for the primary purpose of accurately reporting and recording the earnings of people who work in jobs covered by Social Security. When SSA assigns an SSN to an individual, it creates a master record of relevant information about the numberholder in its Numident. The Numident includes such information as the numberholder’s name, date of birth, place of birth, parents’ names, citizenship status, and date of death (if applicable). It also contains the office where the SSN application was processed.

It is essential that the Numident be as accurate and complete as possible because SSA provides a number of verification services that allow matching of names and SSNs with SSA’s records. E-Verify (formerly Basic Pilot) is a Department of Homeland Security (DHS) employment eligibility verification program supported by SSA. The purpose of E-Verify is to assist employers in verifying the employment eligibility of newly hired employees....

In 2006, we reviewed SSA’s Numident and determined that the information it contained was generally accurate. However, we estimated that discrepancies in approximately 4.1 percent of the Numident records could have resulted in incorrect feedback when submitted through E-Verify. For example, our review showed that the Numident records contained discrepancies in numberholders’ names, dates of birth, citizenship status, and/or death indications. Because our tests included SSNs that SSA had assigned since 1936, we recognized that some numberholders would no longer be working and would not attempt to correct their SSA and/or immigration records. We also recognized that some inaccuracies were due to numberholders who did not update their records with SSA.

      Those who are ineligible to hold down employment in the U.S. due to their immigration status should be prevented from working. Non-citizens should be prevented from voting in the U.S. However, using numident to achieve these goals is unreasonable because numident contains such a high error rate. We can't exclude 4.1% of eligible workers and voters because of simple record-keeping errors. That's an unacceptably high level of errors for such crucial matters. Don't blame Social Security too much. Numident was created for the agency's internal use. It was never anticipated that it would be used for crucial non-agency purposes.

The Threat Of Mandatory E-Verify

Scott Hochberg, writing at the Huffington Post:

[B]elieve it or not, one of the biggest threats to Social Security this summer could come from an entirely different direction [than the AARP], from an initiative whose main target is not even related to social program spending. I'm talking about E-Verify, a proposed system for curbing the legal employment of every single undocumented worker in America. While seemingly immigration-related, a mandatory E-Verify program could cripple the Social Security Administration (SSA) by concurrently draining already-limited funding while imposing heavy burdens on one of the most efficient government programs in existence. Oh yes, and it would threaten the timely distribution of all new Social Security benefits....

Forcing SSA to handle the administrative nightmare of E-Verify is worse than the usual conservative position of "starving the beast" -- it is more like starving the beast and making it run a marathon while carrying a 50 lb. backpack. That's because in addition to drastically increasing the responsibilities SSA would be faced with, the agency is already dealing with massive budget cuts that limit its administrative capacity.

Groundhog Day

A press release from the House Social Security Subcommittee:

Chairman Johnson Announces Hearing on the Social Security Administration’s Role in Verifying Employment Eligibility

Apr 14, 2011

Focus Of The Hearing:

The hearing will focus on the progress made and challenges created by E-Verify, including the potential burdens on employees, employers and the SSA. The Subcommittee will examine how the current shortcomings of the system could be improved to ease the verification process during this critical time of job creation. Finally, the Subcommittee will also review other proposals to expand employment eligibility verification, including enhancing the Social Security card with tamper-proof, counterfeit-resistant or biometric features and increasing enforcement through the sharing of taxpayer wage information.

Republicans seem to be doing a replay of the exact same hearings they held the last time they were in the majority in the House of Representatives. To be honest, Democrats did the same but with different topics. There is less overlap than there should be.

Surprising E-Verify Problem

All federal agencies are supposed to use the E-Verify system to determine that new hires are eligible to work in the U.S. E-Verify is a Department of Homeland Security operation, in theory, but the data comes from the Social Security Administration.

It turns out that in the first six months of fiscal year 2009, 19% of Social Security's new hires were not cleared through E-Verify according to a report from Social Security's Office of Inspector General(OIG). Forty-four of those new hires would not have been cleared by E-Verify. (The report does not go into this point but probably in most cases, maybe even all cases, the problems preventing the individual from being cleared by E-Verify would have been technical and could have been corrected.) Of those new hires who were verified, 49% were not verified on a timely basis, which is within three days of being hired.

Social Security agreed with OIG that the agency needs to do better.

Federal Computer Week is running a story on this.