Consumer Smarts: Merchant's request for SSN can put shopper in a tough bind

RALPH GUDITZ had excellent credit, but he prefers a prepaid cell phone because he wants to control the minutes he uses and doesn't want to be tied to a long-term contract. So he bought a prepaid phone with T-Mobile.

On its Web site, T-Mobile promotes its Pay As You Go phones as having "no long-term contract, no credit checks, and no surprises."

But when Guditz tried to refill his minutes using the company's Web site, he got a surprise. He was asked to give the last four digits of his Social Security number in order to process his credit card purchase. When he refused to give it to them, for privacy reasons, they refused to sell him the minutes, he said.

Even though a representative from his Visa issuer talked to someone at T-Mobile and said the transaction had been approved, Guditz said T-Mobile wouldn't relent.

T-Mobile "should completely stop demanding SSNs from all of its prepaid customers," Guditz said.

Q: When can a merchant ask for additional information on credit card transactions? When can a business ask for your Social Security number?

A: Merchants can ask cardholders for their identification, but they can't make it a condition of acceptance, according to Visa's policy for credit card acceptance. And while nothing prevents a private business from asking for your Social Security number, it doesn't mean you have to give it. Unfortunately, the business can refuse to provide you service if you don't give the information; this can put consumers in a tough bind if the request is for an essential service.

Guditz doesn't see why he should give out his Social Security number, particularly to refill minutes on a prepaid phone. His biggest concern is with companies collecting personal information and the potential for identity theft.

A spokeswoman with T-Mobile would not comment directly about Guditz's case, citing customer privacy.

"T-Mobile is committed to delivering the best experience in wireless to our customers," the spokeswoman told the P-I. "If a customer is using a credit card to purchase products or services, additional information may be needed to verify the customer's credit card information and to protect the customer against unauthorized credit card activity."

She added: "If a customer is not comfortable providing the information requested over the phone or online, they can also purchase products and services at any T-Mobile retail store or authorized dealer nationwide."

Guditz said he would have gladly given T-Mobile the three-digit code on the back of his credit card or other alternative supplemental information, but the representative never asked for it. More and more merchants are asking for that three-digit CVC/CVV code as a way to ensure that the person using the card actually has possession of it.

Guditz also wanted to purchase his minutes online because it was far more convenient than going into a store.

"Why would anybody want to get in the car and drive somewhere to do something you can do in three minutes on the Internet?" he asked.

According to Visa rules, which apply both to online and in-person transactions, "Merchants should not ask for ID as part of their regular card acceptance procedures." MasterCard has a similar policy.

"Although Visa rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance," according to Visa's credit card acceptance policy. "Therefore, merchants cannot refuse to complete a purchase transaction because a cardholder refuses to provide ID."

MasterCard's policy notes that merchants may require the cardholder's ZIP code or address to complete a mail, phone or online transaction. But requiring the last four digits of a Social Security number is unusual.

One case in which merchants can ask for ID is if the cardholder hasn't signed the back of the credit card during an in-person purchase. Merchants are told not to accept the card unless the customer signs the back and shows ID.

If a private business insists on getting your Social Security number and you see no reason for it, the Privacy Rights Clearinghouse recommends that you speak to a manager to discuss what alternatives you have to providing it.

"If the company will not allow you to use an alternate number such as your driver's license number, you may want to take your business elsewhere," the group advises.