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SINs On Mortgage Applications

SIN-MortgageCanada’s Privacy Commissioner seems to butt heads with the mortgage industry on the collection of social insurance numbers (SINs).

The Commissioner isn’t too fond of using SINs on mortgage applications.  Her office put out a report June 8 that states:

A “SIN is not required to conduct a credit check.”

“There is no legislative requirement for the SIN to be collected for [mortgage purposes].”

“The Office of the Privacy Commissioner is of the view that the SIN should not be used as a general identifier and organizations should restrict the collection, use and disclosure of the SIN to legislated purposes only.”

Assistant Commissioner Elizabeth Denham, tells us:

“We recommend that no private sector organization request the social insurance number from a customer, and that no customer give the social insurance number to a private-sector organization, unless the organization is required by law to request it.”

That creates a potential conflict because the private nature of SINs generally makes them a reliable part of the identification verification process. ID validation has become vital in an environment where mortgage fraud is a serious risk.

According to the Canadian Bankers Association, there is “nothing specifically legislated that requires banks to ask for a SIN for mortgage purposes.”

“Specifically” seems to be the key word, however.

Certain provincial jurisdictions and regulators do, in fact, require lenders and brokers to make a “best efforts” attempt to ascertain a person’s identity. Confirming a customer’s SIN against credit bureau records has been an important means of doing so.

Lenders, in general, like to see SINs on mortgage applications. As CAAMP’s VP of Education and Professional Affairs, Mark Webb, notes: “Lenders expect that agents ask for the SIN but the client has no obligation to provide it.  If the client refuses then it is up to the lender to assess how they will respond to the application.”

Webb advises that, “Brokers should not make any change with respect to current practices regarding getting SIN numbers.”

From a practical consumer standpoint, the underlying question should be: is the person taking your SIN trustworthy and does he/she store clients’ information in an extremely secure manner. If so, then many feel that SINs should continue to be an essential fraud-prevention tool.