Child identity theft is an extremely common crime that creates lasting damage and does not get the attention it deserves. According to a 2012 Report by All Clear ID, children are targeted 35 times more often than adults in identity theft crimes. Children are an easy target for thieves because their credit histories are clean, and because in many cases the crime is not discovered for years.
These crimes may be perpetrated by strangers, but sadly that’s not always the case. In fact many times, the perpetrator is the child’s own parent or relative. This could happen in situations such as split households, or when a parent has ruined his or her own credit and rather than repair it, chooses to use the child’s clean credit history. Other times, it’s a family friend or acquaintance.
The Warning Signs
Many times, people don’t discover that they were a victim of childhood identity fraud until they become an adult and begin to apply for credit cards, student loans, and jobs. This can be devastating to the victim. Often in these cases, the trail is cold – loans have changed hands as they’ve been sold or banks and lenders have merged. The thief has ruined the victim’s credit and abandoned use of it by this time. For these reasons, it’s every bit as important to monitor your child’s credit as your own.
I’m not trying to make you paranoid. Don’t freak out if you get a credit card offer for your child in the mail – often that’s just a result of companies using poor data. But do keep an eye out for the following:
- Multiple credit cards, checks or pre-approved credit card offers in the child’s name show up in the mail
- Collection agencies calling about accounts in the child’s name
- A notice from the IRS regarding the child’s income taxes
However, as you won’t always get any of these, it’s a good idea to take proactive steps to monitor the child’s credit as well. You can do this by checking www.annualcreditreport.com to see if a credit report appears under your child’s name.
How and Why They Do It
Perpetrators of child identity theft gain access to your child’s information in a variety of ways. As I said before, thieves are sometimes friends or family members, so they may have access to personal information not available to the public. However, there are ways for strangers to access the information as well. For instance, you may be putting your child’s social security number on paperwork for schools, doctor’s offices or other programs in which your child is involved, or you may carry their SSN cards in your wallet or purse.
Since children rarely use it themselves, it’s attractive to criminals, who use it to create false identities and open bank accounts, credit cards, utilities services, fraudulent tax returns, government benefits, jobs, and more.
How to Protect Your Children
There are several steps you can take to protect your children from becoming victims of identity fraud:
- Always safeguard your child’s personal information – especially social security number – by keeping it in a secure location. Don’t give anyone, even friends, access to that location.
- When you receive school forms asking for personal information, read them carefully and look for the area where you can “opt out” of sharing contact information with third parties
- Ask the school, doctors office, or other organization what the information will be used for and verify that it will be kept in a secure location, and ask how they’ll dispose of it. If you’re not comfortable sharing the SSN, ask to use a different identifier.
- As you would with your own information, make sure anything you share electronically is shared via secure websites.
- If you’re disposing of any information about you or your child, shred it before you throw it out. Delete electronic files or keep them in secure digital vaults.
- If you have any personal information stored on your cell phone or computer, make sure you know how to completely erase that information before getting rid of the device (especially if you’re sending the phone back under warranty, selling it or giving it to any third party)
- Teach your child about strong passwords, anti-virus software, safe browsing and phishing scams
- Teach your child about privacy settings and oversharing on social media. Help them learn to be aware of information in photos such as specific locations or backgrounds, birth dates or any other identifiable item.
What if You Discover Your Child is a Victim?
If you should discover that someone has used your child’s identity for financial gain, you should act immediately. Unfortunately, many parents are hesitant to file police reports in cases where the perpetrator is a friend or family member, but for the sake of recovering your child’s credit, it is important that you do so.
You should also file a fraud report with the Federal Trade Commission. You may have to contact each of the three major credit reporting agencies (Equifax, TransUnion and Experian), and ask them to remove all accounts, inquiries and collection notices. You will of course have to provide proof of the child’s identity and that you are his or her parent. You may also request a credit freeze for the child’s name, or place a fraud alert. Both of these steps make it more difficult for criminals to open new accounts. The ID Theft Resource Center provides a more exhaustive list of actions to be taken in various scenarios.
For parents, protecting your children is a top priority. If you have any tips for how other parents can safeguard their children’s financial future, feel free to comment here!