[Download the entire report here, Simulation Studies of Social Security Number Validation (PDF, 104K).]

Introduction

All banks in the United States must have Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance procedures. These procedures include a Customer Identification Program (CIP) requiring a taxpayer ID. Yet private institutions have no means to directly verify with the Social Security Administration the issuance of a Social Security Number (SSN) to a specific, living person outside the context of employment. So it is fortunate that the SSN itself can be validated against a list or table of numbers that were actually issued on a date that is consistent with a person's age. (See our related page on Fraud Detection.)

This simple technique of Social Security Number validation is highly recommended for due diligence in Customer Identification Programs, particularly at the initial point of contact or account inception. On a per-transaction basis, Social Security Number validation is remarkably cheap because it requires nothing more than a computer-driven table-lookup. Under several reasonable models of fraudulent use, it is also remarkably effective when combined with data for age or birth-year and an accurate SSN issuance history.

Methods and Materials...

Results...

Discussion and Conclusion...

References...