The U.S. House of Representatives approved legislation on April 17 that U.S. Reps. Carlos Curbelo (R-FL) and Randy Hultgren (R-IL) led to crackdown on so-called synthetic ID fraud in which children’s identities are commonly stolen and used by scammers to create fake identities.
“Unfortunately, South Florida is all too familiar with the lengths at which fraudsters will go through to steal an identity, but the fact that children’s identities and personal information are being exploited at such alarming rates cannot continue to go unaddressed,” Rep. Curbelo said.
The Social Security numbers of one in 10 children are stolen, and children are 50 times more likely to be victimized by identity theft than adults, according to data provided by Rep. Curbelo’s office. In response, the Protecting Children from Identity Theft Act, H.R. 5192, would direct the Social Security Administration (SSA) to begin accepting electronic signatures as customer consent from financial institutions attempting to verify the identities of potential customers.
“This legislation is an effective, bipartisan solution that would limit synthetic ID fraud and help protect millions of identities from being stolen,” said Rep. Curbelo, a member of the House Ways and Means Committee. “We need to ensure that fraud detection is modernized to stop these crimes from continuing to negatively impact American families, and I hope my colleagues in the Senate will pass this bill quickly.”
Reps. Curbelo and Hultgren introduced the bipartisan bill with U.S. Reps. Kyrsten Sinema (D-AZ) and Kenny Marchant (R-TX) on March 7. The bill cleared the House on April 17 on a vote of 420-1. U.S. Sen. Tim Scott (R-SC) introduced the companion bill, S. 2498, in the Senate on March 5, with U.S. Sens. Bill Cassidy (R-LA), Claire McCaskill (D-MO) and John Hoeven (R-ND) cosponsoring the legislation.
“Identity theft affects thousands, if not millions, of children and families a year,” Rep. Hultgren, a member of the U.S. House Financial Services Committee, said on the House floor on April 17. “Among other things, children’s identities were used to purchase homes and open credit card accounts. In Wilmette, Illinois, the Social Security Number of a 13-year-old was used by a fraudster to open a credit card with a plan to use it to pay for plastic surgery. The Protecting Children from Identity Theft Act will strengthen the relationship between the public and private sectors in order to combat identity theft.”
Rep. Hultgren wrote in a March 9 op-ed appearing in Crain’s Chicago Business that SSA is “behind the times” in combatting synthetic identity theft in which scammers use the identity of individuals with “nonexistent credit history,” such as children, to create profiles with credit reporting agencies that can then be used to authorize credit accounts.
The SSA operates what is known as a Consent Based Social Security Number Verification Service, Rep. Hultgren explained. “It is typically used by companies that provide banking and mortgage services, process credit checks, provide background checks and satisfy licensing requirements to confirm the identity of Americans,” he wrote. “And it protects consumers: Third parties do not receive unfettered access to the information. They can simply confirm if a name is affiliated with an Social Security Number or date of birth.”
However, companies are currently required to send “a piece of snail mail” to the SSA for verification. Rep. Hultgren argued that “it’s a no-brainer” for SSA to accept online signatures for consent in today’s ecommerce environment.