Why are our kids, the very people we most want to protect, so vulnerable to identity theft? Because they have unused, unblemished credit profiles. According to Carnegie Mellon University’s CyLab, 10.2% of the children in a recent report had someone else using their Social Security numbers. That figure is 51 times higher than the rate for adults of the same population.
Thieves steal a child’s identity early on, nurture it until they have a solid credit score, and then abuse and discard it. If it’s not discovered in time, fraudulent use of your child’s identity could mean the loss of educational and job opportunities and starting off adulthood at a serious disadvantage with someone else’s bad credit in her name.
Oddly enough, credit checks do not have any way to match your child’s date of birth with that listed with the Social Security Administration. Therefore, the criminal can put down any date of birth and gain access to your child’s credit. The most unsettling part is thatthe age of the applicant (in this case,the person posing as your child) becomes official with the credit bureaus upon the first credit application.This makes clearing a sabotaged credit record even more difficult because you have to prove to the credit bureau that your child is a child and not responsible for thousands of dollars of debt.
In most cases, you won’t discover the illegal purchases and identity theft until your child applies for a job, tries to get a driver’s license or enters college. At that point, you are left with the time-consuming dilemma of cleaning up someone else’s fraudulent mess. If only clearing up a credit report was as easy as cleaning up after your kids.
Common Sources of Child Identity Theft
- Undocumented Workers who need identities to keep working in the US (see NBC News Video Above).
- Organized Criminals who reap huge financial gains with little risk of prosecution.
- Friendly Fraudsters (friends and relatives) who abuse their relationship with the child to cover debts and expensive habits.
Here are some of the ways your child’s information is stolen:
- 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 their identity is 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 Facebook and socially engineers private information out of them
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.
Consequences of Child ID Theft
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 loan, credit card or apartment rental because of a crime committed 10-15 years earlier .
- Being denied access to college, financial aid or a new job based on a past criminal record, falsified earnings or tarnished reputation.
- Having an arrest warrant for crimes your child didn’t commit.
Protecting Your Children
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 is an an award-winning author and keynote speaker on identity theft, internet privacy, fraud training & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.