A unique identifying nine-digit number, better known as the person’s SSN or Social Security Number, is widely used in the US for various purposes. Originally designed to track Social Security benefits or one’s work history, it’s now a central data piece used in Know Your Customer (KYC) verification. Providing your SSN is a standard practice in areas where businesses and government authorities need to check official documents containing the SSN for security reasons.
Automatically, this makes SSNs highly personal and sensitive pieces of data, which, unfortunately, can be used for fraudulent purposes. Today, SSNs are among the most attractive data points for fraudsters who are looking to succeed with major crimes, including money laundering, tax evasion, loan fraud or simply synthetic identity fraud, used for processes like opening new bank accounts.
Below, we explore the key challenges in building a KYC process that verifies whether an SSN matches the individual. We’ll also look into the common SSN verification use cases and determine if it’s truly a compliant component for your company’s customer verification process.
What is Social Security Number Verification?
Social Security Number (SSN) verification is a process that is designed to check if the provided SSN belongs to the individual who’s completing the identity verification. The goal is to confirm the person’s identity and, on top of that, validate their SSN. Companies often rely on software to perform this check using automated database verification methods. This involves cross-referencing the SSN and personal details, such as name, date of birth, and address, with official government records, like those maintained by the Social Security Administration (SSA).
Since many US citizens, permanent and temporary residents, as well as working residents have a Social Security Number, it makes this identifier a good choice for a simple and secure user verification measure. That’s why many US-based businesses and government agencies use it, making it a universal component of their KYC programs, where businesses verify identities to ensure compliance and prevent fraud.
The Importance of SSN Verification
Through SSN verification, organizations ensure the user’s SSN is valid and follows the standard nine-digit format. However, SSNs are often coupled with other ID verification methods, especially in regulated industries, where a stricter KYC flow is mandatory. Since many people living in the US have SSNs, for example, paired with biometric verification, this sort of SSN verification completes the general ID verification process, making it a straightforward process from the end user’s perspective. That’s why SSNs serve as important components for verifying identities.
SSN verification also serves as a safeguard from fraud. Since many businesses today work online and are monetized, offering payments and user-friendly transactions, this level of convenience created opportunities for fraudsters to breach systems, steal data, and, for example, open new bank accounts with forged documents or stolen SSNs that actually don’t belong to them. SSNs are also widely exploited for illicit transactions after criminals create synthetic identities, which are created using real and forged data, making them harder to trace. Often, criminals use SSNs that belong to deceased people, along with other attempts to bypass KYC checks and commit fraud.
Is it OK to Use SSNs Alone for KYC Verification?
Since SSNs weren’t designed as universal identifiers, this data point should not serve as a single component in the company’s identity verification process. This is required to stay compliant with KYC and anti-money laundering (AML) compliance regulations.
For example, according to the Bank Secrecy Act (BSA), US-based companies and organizations that have business relationships with them must have a Customer Identification Program (CIP) in place, which consists of several identity verification measures. CIP is a due diligence practice that financial organizations must carry out to meet their KYC obligations: verify users during customer onboarding.
Practical Approaches for KYC Onboarding Using SSN Data
The onboarding process involves collecting identity information, including the individual’s SSN, and verifying it against records such as their provided ID documents (passport, ID card or driver’s license) or official databases where SSNs are stored to ensure consistency and accuracy.
To achieve this goal in practice, some companies implement eIDV, or electronic identity verification, and use its “2+2 approach”:
- This means that two identifying pieces of information are cross-checked against two authoritative databases.
- From a compliance perspective, such a flow can be used as an enhanced due diligence (EDD) measure for high-risk users who need extra checks.
Methods of SSN Verification
SNNs aren’t just used to track annual earnings or to onboard a new staff member at work. This unique number is required to calculate financial benefits like retirement income or health insurance. However, social security numbers can also be used as unique identifiers during the person’s ID verification process.
We look into a few of the most common SSN verification methods below.
1. Database Verification
Companies use authoritative databases that come from credit reporting agencies, credit card companies, or third-party RegTech service providers, such as iDenfy, that have access to both public and private sensitive information, including SSNs. Regulated entities, such as financial institutions, use trusted sources that store such identity information for SSN verification using databases.
Database verification using SSNs works like this: the company accesses a certain database with SSN data (for example, records held by the Social Security Administration (SSA)) and cross-checks it by comparing SSNs and other personal information collected from the user (such as their name, address, and date of birth). If it matches — the user is allowed to access the network and is onboarded, if not, additional checks, depending on the company’s risk appetite, are required.
2. Document Verification
Verifying social security numbers using document verification involves comparing the user-provided SSN with another official document, such as a W-2 form (which holds wage and tax statement data from employers).
SSNs can be verified and compared with other documents, such as:
- Pay stubs
- Social security cards
- SSA-1099 forms
Sometimes, companies use physical documents or special automated software with features like questionnaires designed to prompt users to upload a specific document. However, comparing this sort of information can be done manually, especially when smaller user volumes are expected.
Related: How to Choose the Best KYC Compliance Software in 2025?
3. eCBSV Validation
eCBSV, or the Electronic Consent-Based Social Security Number Verification, is a form of issuing database verification. It’s also a system that companies use to check if the user’s data, such as their name and date of birth, match with Social Security records. Like other data cross-checking methods, eCBSV confirms whether the information matches by providing a “Yes” or “No” result, verifying information against its issuing source.
Currently, eCBSV is available to financial institutions, such as lending firms or banks. That said, these entities are highly regulated and can’t use eCBSV for SSN verification as the only component of the complete KYC process. Despite that, eCBSV ensures that customers who attempt to forge their personal data or use synthetic identities and fake SSNs can be caught early on as opposed to allowing them to access sensitive information or conduct fraudulent transactions.
4. Online Social Security Number Verification
The Social Security Administration is responsible for managing the Social Security Number Identifier Service, which is a free online tool for companies that need to use SSNs for wage reporting or verification of new hires. For example, this system allows users to verify up to 10 SSNs and names per a single check online. So, this is a convenient method for companies that aren’t highly regulated and need to perform only basic background checks.
What are the Challenges of Social Security Number Verification?
The number one reason why it’s insufficient to use SSNs as the only level of verification is that this piece of data is susceptible to fraud. However, with AI and new forms of fraud, such as deepfakes, sophisticated measures are required to verify one’s identity accurately. Since SSNs aren’t backed with biometrics and, in some cases (like free systems online), are vulnerable to identity fraud. Experienced fraudsters can also create algorithms that predict a person’s SSN with a margin of error.
Some companies use an SSN verification approach that provides results using a “pass” and “fail” format (to see if the data matches or not) to protect the individual’s identity. This means you won’t know which specific information (whether it’s the SSN or the date of birth, for example) caused the verification to fail, making it challenging to address false positives. This makes relying on SSNs for verification challenging, especially without automated or scalable solutions capable of accurately verifying and onboarding large volumes of users while cross-checking their personal details.
On top of that, some users are hesitant to provide their SSNs due to fear of potential breaches. To solve this, companies need to build a flow that is clear to the end user and presents clear consent language with instructions on why you need to collect this data from them. Additionally, other factors should be considered, such as the fact that some US citizens might not have a valid SSN. For example, this happens if they’re a nonresident or an immigrant. In these cases, a Taxpayer Identification Number (TIN) can be used as an alternative or another ID verification method, such as a biometric check combined with a government-issued ID check.
Top Ways to Improve Your SSN Verification Process
There are certain aspects that you should take into account when dealing with sensitive data and building a secure SSN verification process. For example:
- Limit access to who can see stored SSNs.
- Don’t share SSN data using email or similar channels.
- Implement automated SSN verification methods to improve accuracy.
- Use a dual-layered approach to SSN verification (by combining another KYC method).
- Get permission before asking the user to provide their SSN.
- Explain why your organization needs to verify this piece of information.
At iDenfy, we can help you build a complete identity verification process using SSN verification + document verification + biometric verification + database cross-checks — and other formulas based on your industry and regulatory requirements, restricting fraudsters from bypassing the KYC process.
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