Identity theft is on a frightening rise, and the most vulnerable group of victims might surprise you: children ages 6 to 11.
It’s a “startling and disturbing” finding from Child Identity Theft, a recent Carnegie Mellon University study that claims children are targeted as much as 51 times more often than adults.
“Wouldn’t you want to know your child was in foreclosure on a home in another state? Wouldn’t you want to know if your child had run up a huge utility bill across town?” asks academic and study author Richard Power. “These are not theoretical questions, these are real-life questions that the parents and guardians of children in this report have been forced to come to grips with.”
A child’s identity is an enticing opportunity for credit criminals. Children often have little to no credit, providing a spotless foundation for a criminal to build upon. Once personal data is acquired, such as a Social Security number, birth date or address, it can be used to create fraudulent accounts in the child’s name. Unfortunately, personal information isn’t as secure as consumers would like to believe.
The Allure of a Child’s Credit
According the Department of Justice, many people do not realize how easily criminals can obtain our personal data without having to break into our homes. Credit criminals can use methods such as “shoulder surfing” or “Dumpster diving” to actively seek out the information. Even something as minuscule as supplying a Social Security number on a routine form puts the child at risk for identity theft, should it end up in the wrong hands.
Additionally, most young victims won’t be old enough to open financial accounts for at least another decade, which allows the identity thief to go undetected for longer periods of time.
Power noted one Kentucky boy as a prime example of this. At just 14 years old, Nathan had a credit history that spanned more than 10 years, along with several defaulted credit cards and a foreclosed mortgage to his name. By the time his parents filed a police report, a California man had used Nathan’s Social Security number to accrue more than $607,000 worth of debt.
Child identity theft takes longer to both detect and resolve, according to the 2012 Child Identity Fraud Report, and this difficulty may be why one in three child theft issues remains unresolved.
Theft Takes its Toll
Though it’s near impossible to guarantee complete protection against child identity theft, there are measures parents should take to help prevent such extensive damage.
- Handle all personal information with extreme caution. Identifying data, such as credit card and Social Security numbers, should never be given over the phone or disclosed in a public place. In the event a person or organization does request that kind of information, ask questions before providing it.
- Check and maintain each child’s credit report regularly for any unusual activity. Credit reports are not automatically established at birth, so especially at such young ages, any activity is unusual activity. While each of the three major credit bureaus are required to provide a credit report free of charge once a year, the procedure for obtaining the report of a minor is a little different. TransUnion is perhaps the most parent-friendly, with a form specifically for child inquiries.
Upon request, the bureaus will check if there is a credit record for the child and respond accordingly. If there is no credit on file, there is no cause for worry.
If a child may have already been a victim of identity theft, immediate action is required. The FTC provides a comprehensive guide to recovering from identity theft, which suggests the following as a few standard steps of where to start:
- Establish an initial fraud alert. Contact one of the three credit bureaus and ask them to place an initial fraud alert on the child’s credit report. The bureau is required to notify the other two bureaus of the alert, which will last 90 days. The alert can be renewed and/or extended upon request.
- File an Identity Theft Affidavit with the FTC. This can be done online or over the phone. The Identity Theft Affidavit is generally accepted by most creditors, retailers and other financial institutions, which will simplify the process of notifying each account listed on the child’s credit report of the fraud. After alerting the companies of the fraud, request a letter from each to verify the accounts in question have been closed and the debt has been discharged.
- File a police report with the local police department. Ensure the police report lists the fraudulent accounts and get a copy to be used for verification when alerting banks, creditors and other institutions.
Resolving a case of identity theft can take countless hours of time and effort, and can often seem like an uphill battle. Even after a child’s identity has been restored, parents may still want to consider requesting an extended 7-year fraud alert from the three credit bureaus.
Photo courtesy carbonNYC