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SSN Fraud: Data security and privacy when car shopping in 2023

Chris Teague

Chris Teague

When you’re shopping for a car, it can be easy to get caught up in the process and lose track of important personal information. Your social security number comes into play during the loan process, and if it’s compromised, you can be in for a rough ride. Access to your social security number gives bad actors the ability to sign up for financial and healthcare accounts, and could help them disrupt other parts of your life. While those issues can be annoying and even very costly in some cases, social security fraud is a much more serious issue that can take significant effort to undo. 

The good news is that there are steps you can take to protect yourself when car shopping and to recover if you fall victim. It’s also worth noting that financial institutions and other entities generally have your best interests in mind, as it’s much harder for them to stay in business if their customers’ data is stolen every other day. 

Data security and privacy

Remember that the people working at your lender, bank, and other institutions take the problem seriously. I was a data analyst at a large community bank for a few years, and protecting customer data was our top priority, to the point that we avoided working on some projects that were deemed too risky for customers’ information. At the same time, we constantly communicated with customers about how to protect themselves and to be aware that the bank would never reach out to ask them for sensitive information over the phone. 

While you may not hear from your bank as often, there’s a great chance that it is taking the same precautions we did years ago at my bank. Beyond losing your data and trust, banks can face steep fines for mishandling customer data or communicating through insecure channels. The Securities and Exchange Commission has levied billions in fines over the years, making data breaches expensive mistakes for banks of all sizes. 

How does data security and privacy relate to buying a car? 

When you apply for a loan or get preapproved, your social security number is involved, and while online loan applications can be safe, it doesn’t take a deep-dive Google search to find several instances of database hacks. At the dealership, it’s important to safeguard your information on paper documents and make sure that they are held in a safe place out of the reach of non-authorized employees. 

What are Social Security Numbers?

Social security numbers came about in the mid-1930s as part of The New Deal legislation. It’s a unique numerical identifier that helps the government track income and other activities, such as opening a bank account and signing up for a home loan. The numbers used to be arranged in specific ways to denote the person’s birth area and birthdate, but that changed in 2011 due to security concerns. No numbers have been reused, but errors have been recorded, such as two people being issued the same number.

Social security identity fraud is a term that encompasses several activities, ranging from using another person’s social security number to obtain benefits from the government to obtaining credit cards and other accounts in someone else’s name. Research has shown that social security numbers are compromised more than credit card numbers in data breaches. Unfortunately, they are the keys that allow scammers to gain access to a wide range of other pieces of personal information. 

Once they have access to your social security number, a thief can use that information to apply for credit cards, take out loans, and obtain other benefits in your name. Worse, they can file taxes on your behalf, get medical care, and other financial crimes that could take years for you to sort out. 

Data security and privacy

Types of Social Security Fraud

There are a few key types of social security fraud you need to know about.

Benefits Fraud

When another person gets ahold of your social security number, they can apply for and receive social security benefits without your knowledge. This can include a monthly social security check, healthcare benefits, and other things typically limited to a specific group of people. You could miss out on benefits that you’re owed and could potentially rack up thousands in debt if this ends up being the case.

Sale of Personal Information

Stealing your information to obtain credit or financial benefits is one thing, but some thieves go a step further and sell the numbers on illegal marketplaces. This can make it nearly impossible to track down who has your information and how it’s being used because it could have been sold multiple times to bad actors worldwide. 

Data security and privacy


Impersonation is when a person steals your information with the intention of acting as you or your representative. This can also be the case if someone impersonates a legitimate benefits recipient. Even if a thief doesn’t use your information to get a new account or take out loans, they could use your SSN to gain employment or other benefits if they are undocumented and in need of verification. 

How Common is Social Security Fraud?

Social security fraud is entirely too common, potentially costing Americans billions of dollars every year. The Social Security Administration estimated $8.3 billion in improper payments in 2020, and the IRS found $10 billion in fraud schemes in 2021. The Federal Trade Commission recorded 17,995 reports of imposter scams through the second quarter of 2022, with losses totaling $46 million. Many never speak out due to embarrassment or other issues, so the real totals could be much higher. Unfortunately, the perpetrators aren’t usually small-time thieves and are instead part of more extensive networks that specialize in sweeping for personal information. 


How Do Thieves Get Social Security Numbers?

Outside of car shopping, there are several methods a thief can use to get ahold of your personal information. One of the easiest and most common is the physical theft of your social security card. Carrying your card with you every day is not advised because losing the card or having it stolen provides a direct path to your financial life. It’s best to keep the card locked up at home and ensure it does not get mixed in with other paperwork. You may need the card when applying for a new job and completing the documentation, but don’t forget to return the card to a safe place as soon as possible.

Thieves can also phish for your information by trying to convince you that they’re a legitimate entity working with real personal information. They can do this with email scams that use frightening language to get you to click malicious links or make payments to an unsecured website. The messages often look and read like legitimate notes from service providers, but a bad actor can easily steal the information you enter. 

Data security and privacy

You may also encounter malware, which can be used in connection with phishing emails to install tracking software on your computer. Once installed, a thief can view your personal files, track your keystrokes, and generally cause havoc in your online life. Don’t click on suspicious emails from senders you don’t recognize, and never provide sensitive personal information to a stranger on the phone. 

Finally, data breaches provide thieves with many of the pieces they need to impersonate you. Companies ranging from online retailers to dating apps have seen their sensitive customer data float out the door as hackers and thieves access databases and spread the information across the internet. Unfortunately, there’s not much you can do to prevent data breaches. Regularly changing your password and cleaning up unused online accounts can be good ways to hedge your risks, but ultimately, your data security is up to the companies that hold the keys.

How to Tell if Someone Has Your Social Security Number

Credit reporting agencies do not list your full social security number on your credit report for security reasons, but if someone has tried setting up accounts with incorrect numbers, they could show up on your report. If you see an incorrect social on your credit report, it’s not an indication that you’re a victim of fraud, but it could indicate that you need to correct information in your credit file. People can sometimes key in the wrong information when setting up legitimate accounts for you, so reviewing your credit reports for incorrect information is a good idea.

If you see unrecognized credit inquiries or accounts on your credit report, it could indicate that someone has your social security number and is attempting to use it to set up new accounts. Check your information regularly to monitor for unauthorized activity. You’re eligible for one free report from each of the three reporting bureaus each year, but it could be a good idea to check more often if you suspect fraud.

Can a dealer take back your car

Unfortunately, one of the main ways people find that they’re victims of fraud is when they file taxes and the IRS discovers an error. If taxes have already been filed or refund taken, the taxpayer will hear from the agency to correct issues. In most cases, the consumer is on the hook for any charges. 

What to Do if Your Social Security Number is Stolen

You have a few options when your social security number is stolen, but none are quick, and none are foolproof. One of the first things that may come to mind is getting a new number. The social security administration can and will issue a new number, but only when there’s verifiable identity theft. Losing your card or even having it stolen are not good enough reasons to get a new number, so you’ll have to come with proof if you want a new social security number.

At the same time, getting a new social security number may make life more complicated in other ways. Your credit file is based on your old social, and the information can become jumbled if all of your additional information, such as your address and name, remains the same. You’ll also lose the benefits associated with having an established credit file, and you’ll have to essentially start over before getting loans, such as a mortgage or car loan. Because of this, it’s best to reserve getting a new social security number as the “nuclear option” that is used only when other options have been exhausted.

You can also sign up for a “my Social Security” account, which can help you identify issues with your number. You’ll have to verify your identity and may be asked to provide information, such as past addresses and credit accounts. Once you’re set up, the system can help with monitoring, but be advised that entering incorrect information during the process can cause you to be locked out for a day or more. 

Another great way to keep track of your social security number and accounts created in your name is to sign up for a credit monitoring service. Though they cost money, usually with a monthly fee, credit monitoring is one of the easiest ways to get a handle on how your personal information is being used. You’ll get alerts when new accounts or inquiries pop up, and many programs offer auxiliary services like password vaults.

You can also “freeze” your credit, which prevents inquiries with the reporting bureaus. Freezing your credit takes a few minutes to set up and can prevent unauthorized accounts from being created in your name. However, be advised that you’ll have to un-freeze your credit before you can apply for new accounts, such as a car loan or credit card. The process is a little different at each major reporting bureau, but the minor hassle is worth the added security. 

Frequently asked questions about data security and privacy

Are car loans secure?

When you get a car loan online, the bank has multiple security measures that help protect your data and other information. Read the privacy policy carefully to ensure your data isn’t shared with third parties that might not have the same protections.

Does SSN fraud hurt my credit?

It can. If someone opens an account in your name, you can bet they won’t be tidy with the payments, so the impact could be significant if you don’t catch it in time.

What should I be careful of when financing a car?

Fraud is a concern when getting a loan, but there are many other factors you need to keep in mind. Understand where you stand with your credit to make sure you get the best interest rate, and be wary of added-cost “upgrades” in the dealer finance office.

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