In a December 10 letter from the National Association of Attorneys General (“NAAG”) to Social Security Administration (“SSA”) Acting Commissioner Nancy Berryhill, the Attorneys General of 43 states urged the SSA to “evaluate and make necessary modifications to [its] database” to combat “synthetic identity theft.”  The NAAG cites the 2015 Data Breach Fraud Impact Report, which estimates $4 to $8 billion in losses between 2014-2018 based on synthetic identity theft, and advises the SSA to prioritize updating its database in light of the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act (May 24, 2018, Pub. L. 115-174) (“the Act”).

The NAAG letter describes synthetic identity theft as occurring when “identity thieves use real Social Security numbers along with fictitious names and birthdates to manufacture new identities.”  According to the letter, this type of identity theft primarily affects those with newly-issued Social Security numbers, such as minors and immigrants, and could put them at a disadvantage upon entry to financial markets if the identity theft is not rectified.

Section 215 of the Act directs the “Social Security Administration to develop a database to facilitate the verification of a consumer’s information when requested by a certified financial institution.”  The section further stipulates that the verification “shall be provided only with the consumer’s consent and in connection with a credit transaction.”  Currently, no system is in place for real-time identity confirmation in which a financial institution may compare a Social Security number to a true identity.  Accordingly, the NAAG recommends the SSA expeditiously create “verification systems to accept electronic signatures or other verified methods so that financial institutions and others can quickly verify identity, or flag identity theft in real-time.”