City Examines Stripping Social Security Numbers from its Database to Reduce Risk of Identity Theft

July 30, 2008

(July 30, 2008)  Chicago Aldermen Margaret Laurino (39th) and Edward M. Burke (14th) today introduced legislation that call upon city officials to examine ways to stop using social security numbers for record-keeping purposes and replace them with "unique employee identification numbers."
The proposal aims to reduce the risk that municipal records, which currently contain sensitive personal data, could be compromised by criminals and used for the purpose of identity theft.
According to a resolution introduced by the aldermen, "A person's Social Security number acts as a skeleton key, providing information on his/her credit rating, employment history, and criminal history."
The City of Chicago already uses a unique employee identification number on employee paychecks and on certain health insurance cards, a practice that should be expanded, the aldermen said.
Elsewhere in the nation, some private entities, such as health insurance companies, have already stopped using social security numbers to identify their clients.  For example, Pennsylvania-based Highmark, Inc. and independent licensee of Blue Cross, Blue Shield, Inc. has successfully transitioned twenty-three million members to using unique numerical identifiers in lieu of Social Security numbers.
The Federal Trade Commission estimates that as many as 8.3 million Americans have become the victims of identity theft.  Fraud involving identity theft can take many forms, ranging from opening a new credit card to falsely obtaining medical services.  It is estimated that identity theft has cost businesses and victims over fifty billion dollars in lost revenue to date.
Federal legislation adopted in 2004 prohibits states from displaying social security numbers on drivers' licenses, state identification cards or motor vehicle registration cards.  But more needs to be accomplished.
"The time has come for local government agencies to assess what they can do to make their records safer," Alderman Laurino said.
"While it may be a large and complex task, it would be prudent for the City of Chicago to study ways to remove social security numbers from our municipality's database or to at least begin the process of reducing our reliance on this extremely sensitive personal data, " Alderman Burke said.