Credit Cards.com, February 24th, 2010

Your Social Security number is one of the keys to your financial
health. It’s a unique indentifier lenders use to assess your
creditworthiness. It’s also exactly what a would-be thief needs to
apply for a credit card, mortgage, car loan or job in your name.

If you’re like most Americans, it’s also something you give out all too frequently.

“As with so many procedures in the business world, your Social Security
number is something that many companies ask for, so no one really
questions it,” says James Van Dyke, president of Javelin Strategy &
Research, a research firm that tracks financial services topics. “But
giving out your Social Security number is definitely a practice
consumers should think twice about.”   

Case in point: A recent Javelin Strategy & Research report — the 2009 ID Fraud Survey — found that, among identity theft
victims, 38 percent said the perpetrator had obtained their Social
Security number and used it in the crime. “It’s certainly logical to
say that you could eliminate 38 percent of your risk of identity theft
by limiting access to your Social Security number,” says Van Dyke.

‘Your Social Security number, please’
Still, saying it and doing it are two different things. Many of the
forms you encounter during the day — at doctor’s offices, at the
dentist, at your child’s school — ask for Social Security numbers.
Retailers may ask for it, too, when accepting a check for payment or
before issuing check cashing privileges. Potential employers also need
it, and they may even want a copy of the actual card, says Linda Foley,
founder of the San Diego-based Identity Theft Resource Center (ITRC).
You’ll also be asked for it at your local Department of Motor Vehicles,
car dealerships, pawnshops, drugstores — even at the airport, should
you lose your luggage, she says. In fact, you may be surprised at how
far-reaching this practice is, says Foley.  

“A few years ago, we were putting some of my mother’s things into
storage, and they wanted her Social Security number to use as a
passcode,” she says. “It’s that prevalent.”

Just because someone asks for it doesn’t mean you have to comply, says
Michael J. Arata, the author of “Identity Theft For Dummies,”
especially since there are only a handful of organizations that
actually have a valid need for it. For instance, anytime you’re
applying for credit — for a new credit card,
a loan, new telephone or cellular service — the creditor will need
your Social Security number to run a credit check. You’ll also need to
provide it if you are applying for federal or local government benefits
such as Social Security, Medicare or Medicaid, unemployment insurance
or disability. Another example: If you or your children receive
services or aid at the state or local level, such as free or reduced
fee lunch or financial aid. The local motor vehicle department, thanks
to the USA PATRIOT Act, has the legal right to ask for Social Security
numbers, too. In addition, when you complete a cash transaction
totaling more than $10,000 you’ll be required to provide your number so
that transaction can be reported to the Internal Revenue Service, says
ITRC’s Foley.

Read more of this article.

Retirement Risks:  Never give out your social security number if you can possibly avoid it, almost all financial security professionals agree.  You might also consider reading up on other major risks to your retirement at NewRetirement.com