“Why do you need to know my teen’s social security number?”
That’s one of most common questions I hear when opening prepaid card accounts for families.
Short answer: it’s the law.
Longer answer: the law has its origins in the 2001 USA PATRIOT Act which provides tools to intercept and obstruct terrorism. Section 326 of Title III stipulates that financial institutions must take reasonable steps to identify owners of bank accounts as a means of counteracting money laundering operations. That means putting in place a Customer Identification Program (CIP). You’ll also hear banks refer to this as Know Your Customer (KYC). Section 326 of the PATRIOT act was implemented by federal regulations in 2003. The bottom line: financial institutions must collect the name, date of birth, address, and social security number or other government identification number (passport number or other similar information in the case of foreign persons) for the legal account holder at the time a new account is opened.
Super long answer for insomniacs: read the FAQs for Final CIP Rule from the Treasury Department’s Financial Crimes Enforcement Network. Or, read through the actual federal regulations: 31 CFR 103.121. Zzz...
Why is Social Security Number part of the requirement? Your SSN is the one piece of identifying information that is:
- Universal. Any US citizen who wants to hold a job or receive any government benefits needs an SSN. That’s pretty much everyone.
- Unique. Government clerical errors aside, each SSN identifies one and only one individual in the US.
- Unchanging. Unlike your address or even your name, your SSN sticks with you throughout your life.
So, if you’re opening a financial account for your teen and a social security number is not part of the identification requirements, your question should really be:
“Why don’t you need to know my teen’s social security number?”
Or, if you really want to get technical, ask: “How are you complying with 31 CFR 103.121?”
Like this tip? Get the next one in your inbox by subscribing here.
Want to turn these tips into action? Check out FamZoo.com.
No comments:
Post a Comment