Tuesday, February 22, 2005

Privacy ... On Thin Ice

This story illustrates how easy it is for our closely guarded financial information to fall into the wrong hands, even through no fault of our own. ChoicePoint, a so-called data warehouser based in Georgia, somehow allowed criminals access to its database of personal information. Now it has had to notify 145,000 people, located in all 50 states, as to its snafu.

I don't know whether this was a contributing factor, but I am convinced that the use of Federal ID Numbers (aka Social Security Numbers) as a unique personal identifier is wrong for purposes other than use by the Social Security system and the IRS. It's wrong, in part, because you can't simply dispose of the FEIN and start over if it is hijacked. Why? Because your Social Security and Medicare benefits are tied to that number and the IRS uses it to track your tax obligations.

My proposal is this: Outlaw the use of FEINs for purposes other than that for which they were designed: Social Security, Medicare and the federal / state tax apparatus. Secondly, designate a private group of entities that need to track economic history (credit reporting agencies, banks, etc...) to be responsible to design and administer a National Credit ID program. One critical feature of this program would have to be the disposability of ID numbers in the event that the numbers fall into the wrong hands. This would allow persons to resuscitate their credit much more quickly in the event of a "hijacking".

Several corporations are moving somewhat in that direction (for example, by using only the last 4 digits of the FEIN for internal corporate purposes). We need to move all the way, however, before this really does become a national crisis.

UPDATE: Michelle Malkin's got a roundup on this topic. However, none of the cited bloggers has picked up on my idea of using a disposable number for economic / financial identification. I think I'll work on this idea in future posts.

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