The Social Security Administration (SSA) this week announced a major overhaul of its Electronic Consent Based SSN Verification Service (ECBSV) in an effort to reduce cost and broaden its use.
The changes were prompted by a September 2024 OIG report which highlighted concerns about the programs adoption rate and cost putting the program into an existential crisis.
The new fee schedule which was published last month, could lower the fee to as little as 4 cents a pull for the very large providers.
Three Big Changes Are Coming Which Will Cut Cost
The overhaul will involve three big changes that will make the program cheaper and more effective.
#1 Reduced Cost and Fees
The SSA will adopt a phased approach to cut eCBSV operating costs by up to 40%, focusing on only the most critical functions . At the same time, annual fees for are being reduced by about 25% to make the service more affordable while still covering program cost.
#2 – Enhanced Verification Responses
The agency will improve the “no-match” result messages that eCBSV returns when data doesn’t match, providing more detailed information to help financial institutions make decisions.
Currently, eCBSV returns a simple “Yes” or “No” match indicator, plus a death indicator if the SSN holder is deceased . Enhanced responses aim to address industry requests for greater insight when there is no match.
#3 – Integration and Expansion
SSA is exploring ways to integrate the older Consent Based SSN Verification (CBSV) system with eCBSV in a future phase. Combining these services could streamline processes and expand the user base by eventually bringing all SSN verification users into the eCBSV platform.
The Fee Could Go As Low As 4 Cents A Pull
Under the SSA’s new annual fees which were published on their site, the new fees will cut cost as much as 25%.
The new fees range from $6,650 for up to 10,000 verifications to about $7.84 million for up to 200 million verifications . This means the effective cost per SSN verification varies with volume – roughly $0.66 per check at the lowest tier (10,000/year) down to about $0.04 per check at the highest volume tier (200 million/year) .
The reason that the SSA was able to reduce the cost is becuase they finally stabilized their annual fees to about $5 million per year.
The SSA predicts that they will be able to make the program break-even by 2027.
The SSA Currently Processes About 52 Million Identity Checks Annually
The eCBSV system is already handling a significant number of verifications , but volumes are below what SSA originally projected due to the limited participation. There are currently about 100 service providers, but banks can also use the API with a direct connect to the SSA themselves.
The SSA estimated that in 2024 enrolled providers would collectively submit about 52 million verification transactions through eCBSV, but while this is high, it is far lower than the expectations and cost began to climb.
Will Banks Take Another Look At eCBSV?
With annual fees as low as $6,650 a year, and the option for banks to connect directly to the eCBSV portal, will banks now look at this as a viable way to check for synthetic identity?
With synthetic identity hitting all time highs, the math may now make sense. For .67 cents a bank can now go directly to the SSA and verify if the name matches to the person applying for the account.
With the average chargeoff loss estimated at $15,000 per occurrence, simply stopping 1 fraud every two years will deliver an ROI.
Something to consider as part of your toolkit!
