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Markets in Social Security Numbers

Social security numbers used to be just for social security. But the government is the only actor in the marketplace who can produce something, and also mandate demand for it. In the case of SSNs, they’ve created a large demand by declaring that Uncle Sam gets to decide who you may hire. (The gossip-mongers credit agencies have also helped, by declaring an SSN enough to get credit.)

Where there’s demand, there’s a market. Where there’s a market, eventually there’s differentiation. So there are the people who buy in bulk from Choicepoint. There are people who get them one at a time from their students. And as the New York Times reports in “Social Security: Migrants Offer Numbers for Fee,” there are people who rent or sell them:

This process has one big drawback, however. Each year, Social Security receives millions of W-2 earning statements with names or numbers that do not match its records. Nine million poured in for 2002, many of them just simple mistakes. In response the agency sends hundreds of thousands of letters asking employers to correct the information. These letters can provoke the firing of the offending worker.

Since legal American residents can lose their green cards if they stay outside the country too long, for those who have returned to Mexico it is useful to have somebody working under their identity north of the border. [How’s that for a perverse incentive under the law?]

Mr. Luviano decided to pull the plug on the arrangement, however, when bills for purchases he had not made started arriving in his name at his brother’s address. “You lend your number in good faith and you can get yourself in trouble,” he said.

Ian Grigg has more at “Identity is an asset. Assets mean theft … and Trade!

2 comments on "Markets in Social Security Numbers"

  • Dennis Bailey says:

    An idea I’ve been suggesting is to put all SSNs out in the open to completely devalue them. This will force companies to turn to other (and hopefully improved) measures for security.

  • Identity is an asset. Assets mean theft … and Trade!

    This is a good article. It describes what happens when you make a simple number the core of your security system. If you control the number, it becomes valuable. If it becomes valuable then it will either be stolen or…

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