Child identity theft is when someone uses a minor’s personal information to assume his or her identity and commit fraud. This could be applying for credit in the child’s name or using his or her Social Security number to claim a tax refund, for example. Children are attractive targets because the younger a person is, the more time fraudsters have to commit crimes before their victim begins using his or her personal info and discovers the problem. Children also are vulnerable due to their dependence on adults. Family members are among the most common perpetrators of child identity theft simply because they have access to the child’s personal information. Plus, the promise of a clean slate can be a powerful motivator for someone with a history of financial problems.
"My mother was the one who stole my identity when I was a kid," said Allison Betz, an assistant professor of consumer studies at Eastern Illinois University and a victim of child identity theft. "Looking back, my mother did a very good job of isolating me and my father from friends and family, and she had total and complete access to our mail. So you can have a family member who has stolen your identity living in your house and not know it.”
But just how widespread is the problem of child identity theft? It’s hard to tell, given a lack of up-to-date statistics and the fact that many cases go unnoticed. But a 2011 Carnegie Mellon study found that 10% of children’s Social Security numbers were in use by someone else – 51 times the rate for adults. So it’s a good idea for parents and other caretakers to learn more about this issue.
Below, we’ll explain the steps you can take to prevent, spot and deal with child identity theft.
Preventing Child ID Theft
No form of identity theft is easy to prevent, as the practice is constantly evolving. But simple steps can drastically reduce your child’s odds of being victimized:
- Guard Your Child’s SSN: As is the case for adults, your child’s Social Security number is the key to much of his or her financial life. So try not to share it with anyone, including family members and friends with no legitimate need to know. Perhaps store your child’s physical Social Security card in a safe deposit box, too. It’s also wise to create an account for your child on the Social Security Administration’s website, so a fraudster can’t beat you to the punch.
- Review School Data Practices: Your child’s school district is likely to be one of the only organizations that have access to his or her personal information. And that makes it a big security risk. It’s a good idea to review the district’s or school’s policies on its website, though updates might be sent home in paper form. So make sure to read all school correspondence carefully, especially if it requires a signature. You don’t want to inadvertently sign away your child’s privacy.You can also review the Family Educational Rights and Privacy Act to understand exactly what you’re entitled to. Similarly, you may want to review the privacy policies of other parties, such as doctor’s offices, that might have access to your child’s personal information.
- Authorize Use & Freeze: Many major credit card companies don’t have a minimum-age requirement for authorized users. That means you can add your child to your account as soon as he or she has a Social Security number. As long as you have good credit and pay your bills on time moving forward, this will help your child build the foundation for credit success before reaching adulthood and gaining the ability to qualify for credit on his or her own. As such, it will also result in a credit report being created for your child. And you can then promptly freeze that report, preventing any unauthorized party from accessing credit using your child’s identity.
Child ID Theft Warning Signs
Fraudsters obviously try to hide their tracks, but you can spot them if you know where to look. In particular, financial activity where none should be can lead to some telltale signs of wrongdoing. So keep an eye out for these red flags:
- Suspicious Mail: If you haven’t added your child’s name to any of your financial accounts, he or she should not be receiving preapproved credit-card offers or other financial solicitations. There’s no basis for preapproving someone who has no credit history.
- Collection Calls: There’s obviously nothing to collect from someone who’s never owed money, so you’ll know something’s not right if debt collectors come calling for your child.
- Credit Denial: Victims of child identity theft often don’t discover the crime until they apply for their first credit card and get denied due to poor credit history. Someone who’s never used credit before shouldn’t have any credit history, let alone a bad one.
- Inability To Get A Driver’s License: Identity thieves often obtain a driver’s license using their victims’ names to help facilitate additional fraud. Two people obviously can’t have licenses tied to the same Social Security number.
How To Deal With Child ID Theft
Child identity theft is really no different to deal with than adult identity theft, assuming the parent isn’t the perpetrator and can assist in the clean-up process. It’s obviously a lot harder for a young person to tackle personally, but it’s not impossible for older kids. One just has to follow a few simple steps:
- Complete The Dispute Process: It’s essential to rid your child’s credit report of all fraudulent information. Otherwise, it could damage credit further and keep your child vulnerable to fraud. So pull all three of your child’s credit reports from AnnualCreditReport.com, and review them for errors. File disputes with the credit bureaus for any suspicious information you find, notify affected creditors and submit an Identity Theft Report to the Federal Trade Commission.Your ultimate goal is to suppress all fraud on each of your child’s credit reports. When disputing information on a child’s credit report, you will need to include a copy of the Uniform Minor’s Status Declaration.
- Enroll In Credit Monitoring: Freezing your child’s credit report will prevent new credit accounts from being opened under his or her Social Security number, but you should nevertheless sign up for credit monitoring to watch out for problematic public records, address changes, etc. You can sign up for free 24/7 monitoring of your TransUnion credit report on WalletHub.
- Review Other Key Records: Just to be safe, verify that your child’s information is accurate with any other organizations and government agencies that might have it, such as the IRS.