Protecting Your Child from Identity Theft
Child identity theft is a significant problem, often going undetected for years. This type of fraud costs families nearly $1 billion annually in the United States and impacts one out of every 50 children, according to a Javelin Strategy and Research report.
If not caught early, the consequences can be severe. “[Child identity theft] can impact real-life activities” when victims reach adulthood and seek independence, explains Parul Sharma, senior director of professional services at LexisNexis Risk Solutions. Therefore, it’s essential for parents to prevent their child’s identity from being stolen in the first place and act quickly if it happens.
What is Child Identity Theft?
Child identity theft occurs when someone illegally uses a minor’s personal information to commit financial fraud. This can include a child’s Social Security number, health insurance information, name, or date of birth, explains David Derigiotis, a Certified Information Privacy Professional and author of “Parental Advisory: How to Protect Your Family in the Digital Age of Identity Theft and Data Breaches.”
With this information, criminals can borrow money and access government benefits using the child’s identity.
Why Are Children Targeted?
Children are attractive targets because they have clean credit histories, making identity theft harder to detect, Derigiotis says. Since children typically don’t need credit, years can pass before the theft is discovered. “The fraudsters have a longer timeline to keep committing the fraud on the same identity,” Sharma says.
Sadly, in some cases, a parent may misuse their child’s identity for financial gain, adding a heartbreaking layer to the crime. Victims of this form of child identity theft often face the hard decision of either suffering the consequences or reporting their parents to the authorities.
What Are the Risks?
Child identity theft that goes undetected for years can be more complex and damaging than adult identity theft. When a child enters adulthood, the consequences can include trouble getting a credit card, student loans, or even employment, impacting their financial future. These impacts can last for up to seven years until those negative marks age off their credit report.
Unresolved delinquent accounts can also lead to legal trouble for your child. If an unpaid debt in your child’s name gets sent to a collections agency, your child may be hounded by debt collectors. A debt collector may even threaten legal action against them.
Signs Your Child’s Identity Has Been Stolen
Though difficult to spot, several signs can indicate child identity theft. Parents should be suspicious if their child receives offers for preapproved credit cards, unexpected bills, or collection notices in the mail, Derigiotis says.
Other red flags include denial of government benefits, such as food assistance, because someone is already receiving them in their name, says Yaron Litwin, Digital Safety Expert and Chief Marketing Officer of Canopy, a digital parenting app. Another sign is an IRS notice regarding unpaid taxes. Checking your child’s credit report proactively can also help. Derigiotis explains that children under 18 typically won’t have active credit histories; finding one could mean someone has opened a credit card or taken out a loan in their name. Parents can request a free credit report for their child and review it carefully for signs of fraud.
Sharma recommends checking if your child has an open or active credit report twice a year.
Actions to Take If Your Child’s Identity Is Stolen
If you discover your child’s identity has been stolen, Derigiotis recommends contacting all involved financial institutions, businesses, and government agencies to report the theft and dispute fraudulent charges. For instance, if an American Express card was opened, contact American Express to report the fraud. Report any fraudulent applications for government benefits to the relevant agency.
Parents should also report the identity theft to the Federal Trade Commission (FTC) through identitytheft.gov and contact local law enforcement, according to Derigiotis. Keep detailed records of all communications and actions to resolve the identity theft. Request a credit report from each of the three major credit bureaus to review the reports and freeze your child’s credit.
How to Prevent Child Identity Theft
Since resolving identity theft is an uphill battle, being proactive is crucial. Sharma advises parents to “be as proactive as possible in protecting their child’s identity.”
Derigiotis suggests limiting the sharing of your child’s personal information unless necessary. He advises parents to “provide false information about a minor where a full name, address, birth date, and other sensitive information are not legally required.” Exercise caution about exposing your child’s Social Security Number.
He also recommends avoiding posting personal information on social media: “Social media accounts can be scraped for key details, and countless data breaches have occurred, which provide a treasure trove of sensitive personally identifiable information that can be used for identity theft,” he explains. Posting a child’s birthdate or full name online can pose risks later.
If your child has a credit report, Sharma recommends freezing it to make it harder for criminals to open accounts or take loans in their name. Freezing a child’s credit “is a more intensive process compared with applying a freeze to an adult’s credit file” because it requires extensive documentation to verify identity, your relationship to the child, etc.
You can also consider signing up for an identity theft protection service with features tailored for children, such as social media monitoring and parental controls.
Frequently Asked Questions About Child Identity Theft
How common is child identity theft?
Child identity theft is very common, affecting one in 50 children in the United States each year.
How should I report child identity theft?
You can report child identity theft to the FTC via phone, mail, or online; reporting online provides an identity theft report, essential for recovery.
Can you use your child’s SSN for credit?
You should not use your child’s SSN for credit, but a popular method for helping children build credit while protecting their identities is adding them to a parent’s credit card as an authorized user and freezing their credit report.
