Pack their lunch, drop them off at school, check their credit history. That's just one more thing responsible parents need to do to keep their kids safe. With identity fraud crimes reaching record highs, a worrying trend is emerging of data thieves who steal the social security numbers of minors and then open credit cards, apply for loans or government benefits in their name.
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Child identity theft occurs when someone abuses a child's personal data for financial gain. The process is very similar to identity theft that happens to adults, and an individual might open a credit card or apply for loans in your child's name. Kids are an ideal target because they've never been sent to collections or paid a bill late, this provides a clean slate for thieves to do damage over many years. Since most parents rarely, if ever, check on the credit history of their kids, fraud often goes on unnoticed for years. Identity theft can ruin your child's credit before they've even had their first job.
Because of this, children's identities are sold at a premium on the dark web, trading for 10-20 times more than the stolen identity of an adult. Many victims don't become aware of the incident until it's time to start applying for first jobs or student loans. Recovering from identity theft at a young age is a complicated process that can take years of struggling to resolve. The best approach is a proactive one. Prevention and early detection of fraud are your best tools to combat ID fraud from happening to you or your children.
- If your child is denied government benefits, it could be because the benefits are paying a criminal who is abusing your child's Social Security number instead.
- If the IRS sends a notice saying your child didn't pay their income taxes or your child's Social Security number was used on a different tax return.
- If collections agencies start to call you and send you bills for products or services you never ordered or received, this could also be a red flag that someone has stolen your child's identity.
To preserve your child's identity, you can practice good habits and teach those habits to your kids.
Be conservative with their Social Security numbers
- Many forms will request your child's social security number - leave this section blank until you've been told why the information is required and how the data will be protected. This personal information is a valuable currency for criminals, and you should be protecting it as much or more than you protect your finances.
Keep an eye on the mailbox
- Is your child receiving approval offers for credit cards in the mail? This mail may not always signal identity theft, but it is worth looking into. If your child is receiving a letter from a collections agency, this is a huge red flag that you should address immediately.
Lock away your child's Personally Identifiable Information
- Social Security cards, birth certificates, etc. shouldn't be in your wallet, purse, or glove box. The documents should be stored in a fireproof safe in your own home. Paperwork that contains any personally identifiable information should also be kept locked away or shredded before being thrown away. Keep it inaccessible to any service providers or guests that enter your home.
- 1 million children were victims of identity theft in 2017
- average age of victim: 12 years old
- 25% of victims continue to deal with problems a decade after the fact
- Over 1/3 of victims seek professional help to deal with depression, stress, and anxiety related to their incident
- $2.6 billion in total losses related to child identity fraud
- $540 million in total out-of-pocket costs to families
If you find out that your child's information is being misused, your first step should be to contact each credit reporting agency. In the United States there are three:
- TransUnion: email@example.com
- Equifax: 1-800-525-6285
- Experian: 1-888-397-3742
Request each agency to remove all accounts, inquiries, and collection notices from all files associated with your child's name and social security number. Ask one of the three agencies to place a fraud alert on your child's credit report. The agency you contact will then alert the other two agencies.
Next, contact every business where child's information has been misused and request them to close and flag the fraudulent account.
Finally, contact the FTC online to file a report or call them at 877-438-4338.
- Visit https://identitytheft.gov/Steps to find out if your child has a credit report (most kids don't have a credit file if they do it's a red flag)
- You may also consider creating a credit file for your child and placing a credit freeze until they need it
- Visit https://identitytheft.gov/ for detailed steps on how to freeze your child's credit file
Originally published on 01/08/2019