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"I Won't Tell You My Social Security Number!"
"And I don't have to give you my zip code, either!"
by Boris Melnikoff
Some new accounts personnel around the country have been approached by would-be-customers, most times accompanied by a "friend", and asked to open an account. When asked for things such as address, identification, and social security numbers, the person who is being interviewed responds by refusing to divulge their social security number or zip code. The person will then hand the innocent and unsuspecting new accounts employee one or two documents they have prepared and brought with them.
These statements are supposedly "reprinted from 'Freedom League', Jan. 1984" and from "Vol. I, No. 6", but with no other references.
Privacy Act of 1974
One refers to the Privacy Act of 1974, and quotes it, out of context, as "It shall be unlawful…to deny to any individual any right, benefit or privilege provided by law because of such individual's refusal to disclose his social security number."
It goes on to say that "should a right, benefit or privilege be denied you when you decline to provide your social security number, you may file suit and are guaranteed to win a judgment of 1,000 federal reserve notes, plus costs and attorney's fees. This will be paid by the individual, business or government agency who wronged you. It is suggested that you take someone with you when you assert your rights under the Privacy Act. They will witness the incident and testify (if necessary) to the facts."
It finishes one section by stating, "So far, we have never heard of anyone who was informed in this manner who still insisted upon knowing the social security number."
Well, we have.
Does Not Apply
The Privacy Act of 1974 does not prohibit a financial institution from requiring a customer to provide his or her Social Security Number or Taxpayer Identification Number in order to open an account. In fact, the Privacy Act of 1974 by its very terms applies only to government agencies and does not apply to private parties such as banks, thrifts, savings and loans, etc. (See, 5 U.S.C ~552a(a)(1). Furthermore, federal regulations require financial institutions to obtain Social Security Numbers or Taxpayer Identification Numbers from their customers in all cases where the account will earn interest. Failure to obtain such Social Security Number or Taxpayer Identification Number may, in fact, subject the financial institution to fines and penalties.
ZIP Code Use Voluntary
The second document dropped on the credulous new accounts clerk is titled "ZIP Code Use Invokes Federal Jurisdiction" and starts by telling the reader that "Use of the ZIP Code is voluntary. You should know that the Postal service cannot discriminate against the non-use of the ZIP Code."
It goes on (and on, and on) to tell you to "Remember these individuals may be agents of the government or, even worse, are advocating a one world government by the use of the social security number and the ZIP code."
ZIP Code Can Be Required
Although the United States Postal Service cannot, in most cases, refuse to deliver mail simply because the mail does not contain a zip code, there is no law or regulation that prohibits a private party, such as a financial institution, from requiring a person to furnish their zip code as a prerequisite to obtaining goods or services.
"Know Your Customer"
Part of your "Know Your Customer" rules and regulations should state very clearly that specific identification is required to open an account. Watch for these individuals who will attempt to coerce and confuse you. You have the right and the responsibility to choose your customers carefully.
Bankers' Hotline advisor Boris Melnikoff is Sr. Vice President and Director of Security of Wachovia Corporation, based in Atlanta, GA. A veteran of 38 years in the security area, Boris has chaired the ABA's Executive Risk Management and Security Committee, the Money Laundering Task Force, and represents the banking security field frequently on television and in publications.
Copyright © 1995 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 5, No. 12, 8/95
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