Could Your Child Be the Next Identity Theft Victim?
In 2014, the most recent year with statistics, someone’s identity was stolen approximately every 2 seconds. That’s a total of 17.6 million Americans or just over 7% of the entire population whose identity – most usually in the form of credit card information – was stolen. And identity theft rates are rising.
I fell victim to a (minor) identity theft that year as well. Someone had snatched my debit card number and made not one, but two $400+ purchases at a drug store in Queens. Since I never spend that much money at any retail establishment, mush less a drug store, my bank contacted me and immediately froze my account. Luckily, I had sufficient funds to cover the transaction (meaning there was no overdraft fee) and I was reimbursed almost immediately. As a precaution, I changed the number on all my other credit and debit cards shortly thereafter and have not had an issue since. To this day, however, I have no idea how it happened or who did it and therefore I have no idea what I could have done differently to protect myself.
Unfortunately for many other identity fraud victims, the simple nature and result of my story is not always the case. In fact, a growing number of identity fraud cases are taking place completely unbeknownst to the victim at all – for years – for a reason that is so sinister and deeply wrong, it’s frightening: the victims are minor children.
Identity Theft and Children: A Reality Parents Need to Know About
Back in 2012, the first major study of identity theft and children was conducted by Carnegie Mellon’s CyLab. Looking at over 40,000 youngsters in the United States, researchers found that a staggering 10.2 percent of them had been victims of some sort of identity fraud. To put this in perspective, the percentage of adults who were victims in that same year was 0.2 percent.
So, what gives? Why are children being targeted by identity thieves and what can parents do to prevent it?
Children are an easy identity fraud target and a sure thing
One of the reasons that identity fraud is so prevalent among children is perfectly displayed in my story above. As an adult with an established credit history and a relationship with my banks and creditors, suspect charges to my account rose an immediate red flag. In essence, I have a legitimate history, so any deviation from that history stands out.
On the flip side, children’s credits are a blank slate. Outside of maybe a bank account for older teens, most have no credit to report at all, so when someone starts a new account using a fraudulent child’s number there is no standard by which to measure legitimate versus suspect charges. Plus, with no history at all, the likelihood of “accidentally” stealing the identity of someone who already got themselves into trouble – and therefore has no credit available – is virtually eliminated.
Children’s identities are not monitored
Furthermore, children’s identities are much easier to keep for long term fraud. Think about it. As an adult, I have a number of safeguards in place meant to protect my identity and my credit. Like many people, I conduct a regular yearly credit report review. I also have at least one bank send me monthly updates on my credit score. Plus, I have those aforementioned banks and creditors looking out for fraud in my account.
By contrast, most child victims and their parents don’t realize that their identity has been stolen until they need to use it. This often occurs when opening a first bank account, getting a driver’s license, or applying for college loans. The end result is that identity thieves are successfully using children’s identities for years and spending thousands before getting caught – way better than the one day, $800 Duane Reade shopping spree my thief got.
The Masterminds Behind Child Identity Theft
It should come as no surprise that, like many crimes involving children, identity theft most often occurs when the thief knows or is related to the child victim. In some cases, parents are the thieves, using their child’s blank credit history to get themselves out of a tough spot financially or recover from life events such as a divorce. Other times, family members and friends use information they obtain from parents or unsecured documents.
Child identity theft is also more likely to occur among children in the foster care system. These children are doubly-vulnerable since their personal information is more readily available to a variety of people through DSS documentation. Plus, non-custodial parents and family members who retain the child’s information may feel less loyalty to an absent child.
However, despite these cases, research has shown that the most likely identity theft victims, at a rate of about 43 percent of all cases studied in 2012, are teens ages 15-18. In many cases, these children are willingly divulging their personal information to predators, many times doing so online through social media or phishing schemes.
How You Can Protect Your Children’s Identity
As parents, teachers, and friends, helping to preserve a child’s identity and financial history is an important part of our role. This starts with being smart ourselves and teaching these children to do the same. Here are some basic guidelines:
- Never carry your child’s social security card in your wallet or allow him/her to do so. If that wallet gets stolen, so does the child’s SSN.
- Secure important documents such as birth certificates and social security cards under lock and key.
- Shred any temporary documents that have your child’s SSN or other identifying information on them.
- Practice safe information sharing, online, on the phone, and in person and teach children to do the same. For example, never give identifying information in a conversation that you did not initiate.
- Always question the need for personal information such as SSN. While some school documents may require it by law, make sure you ask what the info is for and how it will be protected.
Many parents also choose to monitor their child’s credit report as they would their own. It is not necessary to do this every year, but every couple should do, especially as the child reaches the teen years. You can even use the process as a learning opportunity and do it with the child, explaining what the report is and why it matters.
Note that getting the credit report for a child is a bit more complicated than retrieving your own. Oftentimes, additional documents such as a birth certificate or court documents that identify you as a parent or guardian as well as other information such as your own SSN and photo ID will need to be included.
Finally, don’t worry if you contact the credit bureaus and come up empty. No credit report for a child is actually a good thing. It means there is no activity, legitimate or otherwise.
What to Do for a Child Whose Identity Has Been Stolen
In the unfortunate, though not unlikely event, that a child you know has his or her identity stolen, there are a number of additional ways to address this issue, and the sooner the better – hopefully before the child turns 18. For starters, look for these signs of a compromised identity:
- A large number of pre-approved credit card and loan offers in the mail, addressed to the child (P.S. this, on its own, is not enough evidence to constitute fraud, especially if the child is a teen and already has some accounts such as savings or a 529 account in his/her name)
- Notices from the IRS about unpaid taxes or the inability to claim a child as a dependent because they are claimed elsewhere
- Denial of government benefits for the child because the SSN in already in use in the system
- Calls from creditors or collections agencies asking for the child.
You will then need to obtain copy of the child’s credit report to confirm that a theft has taken place. Be sure to check with each of the three major credit reporting agencies – TransUnion, Experian, and Equifax – to get a complete picture of all the information contained on the child’s credit report. Then, immediately contact the authorities to file a police report.
Depending on the extent of the damage done to the child’s credit, clearing everything up can take months, and even years. There are stories of people whose credit is still not clean more than a decade after turning 18 because of undetected identity theft. That’s why the most important thing you can do is pay attention, practice safe habits, and teach children about identity protection from a young age.