U.S. contradicts itself over its ID theft advice

updated 10:17 p.m. ET July 2, 2008

WASHINGTON - The government doesn't have to look very far to see who's ignoring its advice on preventing identity theft.

It's the government itself.

The nation's Medicare agency and the Pentagon want at least 52 million Americans to carry their Social Security numbers in their wallets, contrary to warnings by the Federal Trade Commission that people should avoid doing so.

At least 44 million Medicare insurance cards include the beneficiary's full Social Security number. The number also appears on 8 million Defense Department identity cards used by active duty and reserve forces and their dependents, and on identification cards issued to military retirees. The Pentagon, however, plans to remove the numbers but won't complete the effort until 2014.

And the Internal Revenue Service still tells taxpayers to write their Social Security number on checks used to make payments, a potential problem for those using the mail rather than filing electronically. The IRS has no plans to change the system.

Changing the identity numbers would cost Medicare less than two days spending for the war in Iraq.

Conflicting advice
All this contradicts advice from the Federal Trade Commission, the lead federal agency for deterring identity theft.

"Protect your Social Security number. Don't carry your Social Security card in your wallet or write your Social Security number on a check," the FTC warned in a pamphlet sent months ago to every mailing address in the United States. The Social Security Administration offers similar advice.

Sens. Sherrod Brown, D-Ohio, and Tom Coburn, R-Okla., have introduced legislation that would require Medicare to remove the Social Security number from the insurance cards.

Carrying a Medicare card with the full Social Security number is more of a problem than the Social Security card. People usually need the insurance card to visit a medical provider but can memorize their number and always leave their Social Security card at home.

A costly switch?
The Centers for Medicare and Medicaid said it would be too expensive for the agency, and for medical providers linked to Medicare, to change their systems with new numbers. Medicare officials also said they know of no cases in which identity theft was traced directly to a lost or stolen Medicare card.

Charlene Frizzera, chief operating officer of the nation's Medicare agency, said it would cost half a billion dollars to make the change for Medicare alone. Medicare's budget is $466.1 billion for the current financial year.

The Congressional Research Service, in an analysis of Pentagon figures, said daily spending in Iraq is about $320 million. The figure for Iraq, Afghanistan and related security measures is about $400 million a day.

Frizzera's advice also contradicted the directions on the card itself.

"Our advice is, don't carry it with you unless you know you're going to need it," Frizzera said.

But the back of the card says: "Carry your card with you when you are away from home."

Brown, referring to Medicare's estimated cost to fix the problem, said in an interview, "I don't believe their numbers. They're trying to find reasons they don't want to do it."

The president's Identity Theft Task Force recommended last year that U.S. agencies reduce the unnecessary use of Social Security numbers, which it called "the most valuable commodity for an identity thief."

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