DMA Seeks Balance in Legislation to Protect Social Security Numbers for Legitimate Business Purposes

July 18, 2007 — As Congress continues to seek ways to protect Americans from fraud and identity theft, the Direct Marketing Association (DMA) is asking legislators to adopt a balanced proposal that prohibits the open purchase, sale, and display of Social Security numbers (SSNs), but protects the use of this critical information for legitimate business purposes.

In a letter to the US House of Representatives Committee on Ways and Means in advance of a hearing today, DMA urged legislators to include important exceptions in the current language of the Social Security Number Privacy and Identity Theft Prevention Act of 2007 (H.R. 3046).

DMA supports the goals of this legislation, and strongly encourages strict safeguards for SSNs and other sensitive data that could, in the wrong hands, be used to commit fraud and identity theft. However, the Association expressed concern that as currently written, H.R. 3046 would inadvertently prohibit access to critical information necessary by the business community in its efforts to prohibit fraud.

In the letter, Steven K. Berry, DMA’s executive vice president for government affairs and corporate responsibility, noted that many companies, including the fraud divisions of retailers and financial institutions, routinely rely on SSNs to accurately match information from applications and transactions with data from information service providers to detect fraudulent activity. These tools, Berry added, are particularly important as remote transactions continue to gain in popularity.

Several of DMA’s service provider members are the leading providers of such tools to the cross-section of industries that deal directly with consumers.

“We believe that it is critical to balance the important goals of limiting the SSN with the need to preserve important tools and practices that help businesses and protect consumers,” said Berry. “We are concerned that H.R. 3046 goes too far in its restrictions in a manner that will limit these important tools. We believe that these limitations could hurt our members’ ability to combat fraud and to authenticate customers. This could, in turn, ultimately hurt consumers — clearly not the intent of the legislation.”

Specifically, DMA is seeking an exemption in the bill that would preserve critical business-to-business uses of SSNs for fraud-detection purposes. DMA’s individual request to the House committee today echoes similar positions set forth in a letter signed jointly by DMA, the Consumer Data Industry Association, the US Chamber of Commerce, and other trade associations.

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