If you missed the first part of this series, please visit Child Identity Theft (Part I).
Child Identity theft is the fastest growing sector of the identity theft “industry,” and the numbers are staggering. Although it’s difficult to estimate exactly how many children lose their identities since the crime can go undetected for years, the FTC states that 5% of identity theft cases target children, which translates into 500,000 kidnapped child identities per year, and growing. The Carnegie Mellon CyLab Report states that in 54% of the cases, the child was under the age of 14.
The identity thief is not always a stranger. In many cases, it’s a relative with bad credit who takes advantage of a child’s pristine credit. Conveniently, these family members generally have access to the information necessary to maximize the fraud with little attention. This seems absurd, but imagine a parent who is strapped for cash, has a bad credit score and needs to buy groceries. In this case, short-term thinking blinds the relative or friend to long-term consequences. In other instances, the child’s future is not taken into consideration at all.
Frankly, it doesn’t take much to get the crime underway; all a criminal needs is the child’s name and Social Security number. These pieces of personal information are exposed in a variety of ways:
- When registering for daycare, schools and recreational sports
- On medical, dental and hospital records
- When joining organizations like the Girl Scouts, Boy Scouts, etc.
- When the above information is permanently stored and accessed by volunteers or employees
- When one of the above organizations is breached by a hacker or malicious software
- When an adult befriends your child on a social networking site (MySpace, Facebook) and eventually socially engineers private information out of them
The Three Basic Types of Child Identity Theft
- Financial identity theft occurs when the name and Social Security number is used to establish new lines of credit.
- Criminal identity theft happens when the criminal uses the child’s identity to obtain a driver’s license or substitutes the child’s identity if caught in a criminal act.
- Identity cloning entails using a child’s identity (via information collection or a black market ‘purchase’ of personal information) for medical, financial, criminal and governmental purposes. The most common form of cloned identity theft is committed on behalf of undocumented workers looking for an identity that will keep them working in this country.
For parents, cleaning up the disaster of identity theft for their children is costly and incredibly time consuming. Getting a new Social Security number is almost impossible, and rarely the best option.
Taking steps right now to protect your child from this horrible crime is one of the greatest investments you will ever make in their financial and emotional future.
Protecting Your Children
Acting now on behalf of your child will protect them from consequences common to child victims:
- Starting adulthood with a credit rating low enough to scare away the hungriest of loan sharks
- Being denied a first loan, credit card or apartment rental because of a crime committed 10-15 years earlier (the passage of time makes this crime very hard to clear up)
- Being denied access to college or a new job
- Having a warrant out for her arrest for crimes that she didn’t commit
In the same way that you can’t protect your children from every bruise and scrape, you can’t entirely remove the risk of identity theft. You can, however, prevent or soften the fall if it does happen. Take these steps first:
- Watch for mail in your child’s name. This is a potential sign that credit has been established using their identity. The most common types of mail that signal identity theft are financial (pre-approved credit cards, etc.).
- Consider ordering a free credit report for your child. If you suspect foul play, write to the three credit reporting bureaus (Equifax, Experian and TransUnion) to see if your child has a credit profile (no profile, no chance that it is being used illegally). If they do have an active credit profile, you will need to resolve this with the specific credit bureau. Please note that requesting your child’s credit report repeatedly can actually establish a credit profile in their name. For a more convenient option, use an identity monitoring service for you and your family that alerts you when credit is established in any of your names.
- Stop giving out your child’s personal information. Until you are confident that it is absolutely necessary to receive the services desired, withhold their personal information. More than 80% of organizations that ask for your child’s Social Security number don’t actually need it to establish services. If you must give it, ask them how they will use it, how long they will keep it and how it will be protected while they have it.
- Protect your child’s identity documents. Birth certificates, passports, bank account information, wills and trusts involving children should all be locked securely in a fire-safe or bank’s safety deposit box. Physical document theft is one of the most prevalent ways kid’s identities are stolen.
- If you find evidence of fraudulent activity, contact the police, the source of the fraud and all three credit bureaus. Filing a police report helps to establish your child’s innocence in an official way.Have the credit bureaus FREEZE your child’s credit for maximum protection. Keep detailed records of all correspondence between yourself, the police, the merchant and the credit bureaus. It will come in handy should you ever find yourself in court, as I did.
- Educate your children on the importance of protecting their personal information. Teach them about the value of their personal information: their name, address, phone numbers, email address, Social Security Number and any passwords and PIN numbers. Reinforce that they own their private information and that it should not be shared with friends, over the internet or with anyone whom they don’t know or trust.Education is absolutely the best financial gift you will ever give to them.
In the case of child identity theft, an ounce of prevention is worth a lifetime of financial security. Don’t let the center of your universe become just another statistic. Because you love and protect your children as much as I do, start this process immediately.
John Sileo lost almost a half-million dollars, his business and his reputation to identity theft. Since then, he’s become America’s leading keynote speaker on identity theft, social media exposure and weapons of manipulation. His clients include the Department of Defense, Pfizer and Homeland Security. To learn more, visit ThinkLikeASpy.com.