Statement of Bruce H. Hulme,
President of Special Investigations, Inc.
Representing the
National Council of Investigation and Security Services
before the Subcommittee on Social Security
of the Committee on Ways and Means
Regarding Social Security Number High Risk Issues
on March 30, 2006

 

Good afternoon Mr. Chairman and members of the subcommittee.  My name is Bruce H. Hulme and I am appearing today on behalf of the National Council of Investigation and Security Services (NCISS) where I serve as Legislative Director.  I am past president and chairman of the Council and serve as a member of the Board of Directors.  I have been a licensed private investigator in New York for more than forty years and am president of Special Investigations, Inc. 

We appreciate the opportunity to discuss how Social Security numbers can be used by perpetrators of identity theft, what Congress can do to mitigate the risk of such fraud, and the impact of pending legislation. 

 Social Security numbers (SSN’s) have become the de facto identifier in the United States.  The Social Security number is the single best way to distinguish among people of similar or identical names.  That is why businesses have used SSN’s on identity cards and customer records.  It is also why SSN’s are sought by those who wish to commit fraud, so they may attempt to establish an identity. 

 When Congress created the Social Security System nearly three-quarters of a century ago, it was not intended that the numbers issued to nearly every American would become the universal identifier for modern times.  But that is what has occurred.  An entire system of commerce is predicated on citizens being able to identify themselves based on this identifier.  Unless each person has a viable substitute such as a password to take the place of the SSN, Congress should be very circumspect about eliminating the use of the SSN as an identifier.

 Just as most commerce uses the SSN, the civil and criminal justice systems also require a means of identifying parties and witnesses in lawsuits and the commonality of dates of birth makes the SSN a necessary tool to be sure the courts have positive identification.  It is true that some abuses have occurred by the misuse of the SSN, but the percentage of misuses pale in comparison to the number of positive uses applied every day in our economic and justice systems.

 As a profession that has been trying to help victims through the identity theft maze for years, we applaud Congress' efforts to put additional laws on the books that will bring victims some relief.  Recently enacted legislation should be of some assistance.  The Fair and Accurate Credit Transactions Act included several identity theft provisions, and the 108^th Congress adopted the Identity Theft Penalty Enhancement Act to increase sentences of convicted fraudsters.  We were appalled to read recently that two caretakers who committed such fraud against their elderly patients received suspended sentences.  Until the courts take the crime seriously, it will be difficult to deter such thieves.

 Although a percentage of identity thieves no doubt gather their victims’ identities from the Internet, our experience is that most such thefts result from the purloining of documents, files, charge slips, credit cards, and wallets from restaurants, stores, trash bins, the mails and private property.  In fact, according to the Javelin Strategy and Research survey 47 percent of such theft is perpetrated by friends, neighbors or employees.

 But we agree that additional measures can be taken to further reduce incidents of theft.  Our concern is that some measures, unless amended, would have unintended consequences that could help create a safe haven for criminals and do substantial damage to the judicial system.

 Publicity over data breaches for the past year have led to numerous bills in Congress and state legislatures to require that sensitive personal information, including Social Security numbers, be protected by those who hold it.  Such breaches have occurred not only from data providers, but universities, banks and other institutions.  Breaches have also occurred at every level of government.  These breaches have been caused by lost computers, hacking, misplaced files and other means. 

 We support efforts to protect such sensitive personal data.  Consumers should be informed when such data are divulged and should be provided assistance in order to protect themselves.  And, businesses and other institutions holding such data have a responsibility to protect it.  

 With regard to Social Security numbers, we support limiting their use on government documents, student id’s, health cards and other means of identification that could fall into the wrong hands.  And we certainly don’t believe that such information should be sold on the Internet to anyone willing to pay a fee.   Many of these provisions are found in HR 1745, the Social Security Number Privacy and Identity Theft Protection Act. 

 We do, however, have strong concerns with provisions of HR 1745 and other measures that would have a direct and harmful effect on how our profession conducts lawful investigations.  The Senate Committee on Commerce, Science and Transportation, for example, amended S 1408, the Identity Theft Protection Act, to effectively prohibit the sale of Social Security numbers with few exceptions.  The result would be that databases would not have accurate information and private investigators would be hampered in our efforts to locate individuals and perform many of the functions essential to the judicial system.

 How Private Investigators Use SSN’s

As indicated earlier, the Social Security number is critical for determining identity.  In past hearings, Lexis-Nexis has testified that there are 46,000 men in America named Bill Jones.  Many of them have the same or similar dates of birth.  Licensed private investigators need to be able to positively differentiate between subjects when rendering reports which will be used for many purposes including evidence in court proceedings.  Behind any civil or criminal court case of consequence, you will usually find a licensed private investigator assisting the attorneys involved in such cases.  The investigators are also then bound by the attorney-client privilege which adds a further measure of security to the information developed on individuals during the course of an investigation.  Contrary to popular belief, most investigators work for law firms, insurance companies and corporations, not the general public.

            One critical and effective tool used by private investigators is the “credit header,” that portion of a credit report that includes location and identifying information but discloses no credit data.  That search is by far the most important one currently used by investigators when locating female witnesses.  Since women often change surnames over the course of their lives due to marriage or divorce, it makes it even more critical to be able to identify them by their SSN.  The SSN does not change and allows us to locate these otherwise difficult to find witnesses.  In California recently, database searches led directly to witnesses who recanted testimony and helped free a man wrongly imprisoned for twenty years.

In both civil and criminal trials, justice is served best by all parties getting access to all possible witnesses.  Access to a fair trial is a fundamental right of American citizens.  Without the ability to identify and locate all witnesses, that right is threatened.

The address information is used routinely to locate witnesses, particularly when they may be transient.  Legislation restricting the use of Social Security numbers always provides exceptions for law enforcement.  This creates an obvious issue of due process because prosecutors, with the full resources of the state, would have use of this tool while the accused would not.  The criminal justice system needs balance….the private investigator provides a counterpoint to the investigators in the public sector.

The same situation holds true in civil matters.  Privacy legislation generally provides an exception for insurance companies, thereby creating an imbalance between the insurance defense and plaintiffs’ bars in obtaining evidence in civil trials. 

Investigators do not have access to the central criminal history database that law enforcement officials do, so it is essential to have addresses when seeking information about prior convictions.  With prior address data, investigators know which courthouse records to search.  This information is important for more than pre-employment purposes.  In both civil and criminal trials, attorneys need to know the backgrounds of witnesses and potential witnesses.

Address information is valuable in locating stolen assets.  I was retained by the New York courts in a guardianship proceeding to recover over $300,000 in assets stolen from a ninety-seven year-old retired Army officer by a neighbor caregiver.  Through the use of credit headers I was immediately able to determine the identities and locations of the wrongdoer’s relatives, properties and eventually their assets that had been taken from the victim.  It was the initial header check on the suspect that uncovered an address in Myrtle Beach, South Carolina.  That information developed leads that the victim’s assets had been used to purchase expensive automobiles, real property in South Carolina and increased the bank account balances of the suspect.  All under the guise that the 97-year-old victim, who was suffering from dementia, had given his life savings as gifts to the suspect.  The suspect eventually pled guilty and was sentenced to three to nine years in state prison for second-degree grand larceny and ordered to pay $360,000 in restitution to the estate of the victim, who, regrettably, died a month before sentencing of the defendant.

In numerous cases, such data have led to recovery of funds from persons not meeting their child support obligations.  And missing persons, including abducted children, have been located with leads generated from credit headers.

 It is no secret that law enforcement does not have the resources to respond effectively to most victims of identity theft.  The crime is difficult to solve, and often involves several jurisdictions.  So victims turn to private investigators for assistance. 

 Congress must consider that many licensed private investigators are former law enforcement officers and can assist the overwhelmed public law enforcement sector in fraud and identity theft related cases.  Law enforcement is often under-manned and ill- equipped to deal with identity theft and usually violent crime cases take precedence.  The victims then must turn to investigators in the private sector to assist them in determining the extent of the fraud and the identity of the perpetrators.  Investigators must have access to the necessary tools such as the credit header SSN search.  Without access to this important investigative tool, it will become easier for criminals to shield themselves from discovery.  They are fully aware of the limitations facing law enforcement.

Here is how SSN information helped solve one case:  In San Francisco, an investigator reports working a case for a successful business owner who started getting statements in the mail saying he owed tens of thousands of dollars on computers and other purchases, none of which he knew anything about.  He found someone had hijacked his identity, opened credit card and store accounts in his name and had even opened a web page mirroring his web page and had an e-mail address similar to his.  The San Francisco Police said they would take a report, but would not investigate and suggested he go to the Secret Service.  Although losses approached $80,000, the Secret Service declined to take a report because losses had not reached a $100,000 threshhold.  The victim hired a private agency.  Using credit header information, they learned that the suspect, was an ex-employee with three aliases, three or four social security numbers, and three different dates of birth.  The suspect was apprehended and prosecuted.

 Such information is also valuable for locating lost heirs.   One of our association members reported a case that involved a woman who was left a sizeable inheritance by her uncle in the form of a trust.  The family had not had any contact with her for a number of years, so the attorney handling the trust asked for assistance.  By using header information, the investigator was able to eventually determine that she was recently married and was living someplace in Utah.  He was able to locate her husband's relatives and learned that she and her husband were destitute and living out of a pick-up truck in Oregon.  He sent the requisite documentation to her in care of her husband's relatives and she rightfully obtained her substantial inheritance.  Without access to header information, the investigator would not have been able to locate her.

 A former president of our Council --- NCISS --- helped a custodial parent whose child had been abducted two years prior.  The mother had spent those two years unsuccessfully trying to keep the police interested and writing various public officials seeking help.  A credit header search revealed an address in Palm Beach, Florida, where the estranged husband had recently applied for credit.  The police apprehended the husband and reunited the child with his mother.

 One of our Texas members reports using a Social Security number “trace” to locate a female in need of assistance.  A charitable fund had been set up to assist her with prenatal care and her childbirth.  The credit header was an efficient means for the licensed investigator to quickly locate a needy person for charitable purposes at low cost.

 Last year, NCISS met with members of the Federal Trade Commission to apprise them of the many ways private investigators rely on the SSN.  We presented a dozen actual case examples of the sixty we had brought with us to that meeting.

 We urge Congress to provide that any restriction on the sale of Social Security information include an exception to enable licensed private investigators and other state regulated persons to conduct lawful investigations, including, but not be limited to, identifying or locating missing or abducted persons, witnesses, criminals and fugitives, parties to litigation, parents delinquent in child support payments, organ and bone marrow donors, pension fund beneficiaries and missing heirs.

 It is ironic that the end result of such well-intentioned legislation would be to make it more difficult to assist victims of identity theft and other frauds.  It would make it less likely that the courts would hear from all relevant witnesses in both civil and criminal trials and less likely that stolen funds are recovered.

 In conclusion, I would like to share with this committee the position of the International Association of Security and Investigative Regulators with respect to this issue.  IASIR is an association of state and province regulatory agencies in the United States and Canada, having jurisdiction over a large part of the security industry and investigative profession.  At their annual meeting last fall they passed the following motion:

 IASIR acknowledges that regulated investigators are an integral part of the effective administration of justice, civil as well as criminal. In addition, state licensed investigators provide an essential service to the public, to businesses and government, and to the legal community for the purpose of preventing or investigating fraud including identity theft; reducing business losses such as embezzlement, robberies, burglaries, thefts, fires and other casualty claims; investigating workplace allegations including harassment, discrimination and other workplace risks; locating missing and abducted persons, witnesses, heirs, and deadbeat parents; as well as assisting in uncovering significant misrepresentations or critical non-disclosures in conducting due diligence.

Since access to personally identifiable information is crucial to the welfare of many and often concerns not only individual physical safety but the protections of homeland security, IASIR recognizes and supports the necessity of those investigators, who are licensed and monitored by regulatory agencies, to maintain access to personal identifying information including but not limited to, social security numbers, dates of birth and driver’s license numbers to assist in their important investigative mission.

NCISS stands ready to assist the Committee in its endeavor to protect consumer privacy without causing unintended consequences.