Beware of Transmitting Social Security Numbers - How Maryland's New Social Security Number Privacy Act May Affect You and Your Business

Date: January 25, 2006

Maryland's new Social Security Number Privacy Act became effective January 1, 2006. The Act prohibits, among other things, the public posting of an individual's Social Security number or the public display of an individual's Social Security number. Very few employers or businesses actually contemplate posting Social Security numbers for the public to see, so at first blush the Act may not seem relevant to your company.

The Act, however, is also directed at normally private actions that may become “public” through a breach of security. Transmitting an individual's Social Security number by mail, facsimile or over the Internet is also prohibited.

Practically, the Act will have a huge impact on Maryland businesses, probably far greater than ever expected by the legislature and the general public. The use of Social Security numbers is prevalent in today's society. Social Security numbers appear on insurance cards, credit reports, tax returns and employment applications.

There are some exceptions to the Act, including the use of an individual's Social Security number if required by State or Federal law. Moreover, continuous use of an individual's Social Security number may be permitted under certain circumstances if the user provides an annual disclosure informing the individual of his/her right to order, in writing, that the use of his/her Social Security number stop.

Although the Act does not specifically define how violators will be punished, precautions should be taken to avoid civil liability and to protect the identity of your clients, employees, etc.

  • If you use Social Security numbers in your business, provide the holders of the numbers written notice of the Act and inform them of their right to opt out of such use.
  • Evaluate the effectiveness of your internal procedures.
  • Make employees aware of the new law and regularly verify that your internet connection is secure.
  • If possible, recode your records to use only the last four digits of Social Security numbers.
  • Require an individual to complete a waiver if he/she asks you to forward information containing his/her Social Security number to third parties.

The above outline is intended only as a broad overview of The Social Security Number Privacy Act applicability and does not constitute legal advice.