Individual is denied a loan for not providing a Social Insurance Number

PIPEDA Case Summary #2003-166

[Principle 4.3.3, Schedule 1; Subsection 5(3)]

Complaint

An individual complained that a bank denied him and his wife a loan following their refusal to provide Social Insurance Numbers (SINs).

Summary of Investigation

An individual and his spouse filled out a loan application at a bank, but refused to provide their SINs. A week later, the individual was informed that his application would not be processed without his SIN. His spouse therefore provided her SIN and the loan was quickly approved. The Bank representative indicated that according to the bank policies, the SIN is not required for a loan application. The representative assured the investigator that following this incident, instructions were sent to credit department employees as a reminder of the bank's policies according to which applicants are not required to provide their SIN when applying for a loan.

Commissioner's Findings

Issued April 23, 2003

Jurisdiction: As of January 1, 2001, the Personal Information Protection and Electronic Documents Act (the Act) applies to any federal work, undertaking, or business. The Commissioner had jurisdiction in this case because a bank is a federal work, undertaking, or business as defined in the Act.

Application: Principle 4.3.3 of Schedule 1 of the Act states that an organization must not, as a condition of the supply of a product or service, require an individual to consent to the collection, use, or disclosure of information beyond that required to fulfil the explicitly specified and legitimate purposes. Subsection 5(3) states that an organization may collect, use, or disclose personal information only for purposes that a reasonable person would consider are appropriate in the circumstances.

The Commissioner noted that the use of the SIN has become widespread since it was first introduced in 1964. At the time, the SIN was created to serve as a customer account number in the administration of the Canada Pension Plan and Canada's varied employment insurance programs. In an effort to prevent the SIN from being used as a universal identifier, the federal government adopted a policy limiting the collection and use of the SIN by government institutions within the context of specific statutes, regulations and programs. Although there is no legislation preventing an organization from asking for the SIN for other purposes, mainly to identify a person, the Commissioner noted that organizations subject to the Act should clearly indicate to consumers that providing their SIN is optional and is not a condition for obtaining the service requested.

Following the investigation, the Commissioner determined that the bank was not in compliance with Principle 4.3.3 because the SIN was not required for the loan application. As for subsection 5(3) of the Act, the Commissioner deems it unacceptable that the bank requires customers to provide a SIN to negotiate a loan. In addition, the bank did not correctly apply its policy according to which the SIN is optional and is not a condition of service.

The Commissioner concluded that the complaint was well-founded.

Further considerations

The Commissioner recommended that the bank take steps to amend the current loan application form so that it clearly indicates that the information provided in the box for the SIN is optional.

Furthermore, the Commissioner stated he was pleased that following the complaint, the bank reminded its credit department employees that it is not necessary to provide the SIN when applying for a loan. He also stressed the fact the SIN is not a piece of identification and should not be used as such. He stated the following:

"In keeping with the federal government's position that the SIN should only be used for legislative purposes, I would urge Canadians to refrain from providing their SINs as identification. Otherwise, they would be to risk making the SIN a de facto national identifier, instead of simply an individual's account number for social benefit purposes."

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