Final answer:
The use of Social Security numbers for identification is problematic because they lack modern security features and their widespread use increases the risk of identity theft, potentially leading to serious financial consequences for individuals.
Step-by-step explanation:
One of the problems with using Social Security numbers for identification is that they don't have inherent security features like modern credit card numbers do. While everyone is issued a unique Social Security number, the system was not designed with the sophisticated anti-fraud measures that are now common with financial account numbers. Moreover, the rampant use of Social Security numbers in various contexts has exposed individuals to higher risks of identity theft, or what is also known as "True-name Fraud." In such cases, identity thieves might wrongfully acquire and use someone's personal identification information without permission to commit fraud or theft.
Due to this vulnerability, individuals’ personal and financial well-being can be severely affected. Thieves could potentially drain savings accounts, make large fraudulent purchases, or even create new, illegitimate credit accounts. The prevalence of online activities has only increased this risk, with personal information often being required for various online transactions.