The Social Security Administration (SSA) will allow financial institutions to electronically verify SSN information beginning in June 2020. The agency announced the change in a press release. The name of the new system is the electronic Consent Based Social Security Number Verification Service (eCBSV). If the program succeeds, the SSA plans to expand it within six months.
Individuals must give the SSA permission to run the check. Although that is possible today, the current system requires written consent on paper forms. SSA will now offer a streamlined electronic option.
“eCBSV will allow permitted entities to verify if an individual’s SSN, name, and date of birth combination matches Social Security records,” the SSA said in a statement. “Social Security needs the number holder’s written consent through a wet or electronic signature in order to disclose the SSN verification.”
A New Fraud Prevention Tool for Synthetic Identity Fraud
The new process will help companies detect synthetic identity fraud. In this type of fraud, a fraudster creates a fake persona using real credentials. Fraudsters commonly use this technique to target immigrants and minors. The hope is that providing a simple “Yes” or “No” answer to the data match question will protect these vulnerable populations.
In addition, the SSA stressed that eCBSV cannot be used as an identity verification tool. It’s sole purpose is to help businesses identify fraudulent uses of SSNs.
“eCBSV returns a match verification of ‘Yes’ or ‘No.'” the SSA said. “If our records show that the SSN holder is deceased, eCBSV returns a death indicator. eCBSV does not verify an individual’s identity.”
The pilot financial institutions will pay 50% of the costs to setup eCBSV. Once selected, they will have two weeks to meet their obligation, and will receive a credit towards future transactions under the program.