Identity theft isn’t just a concern for adults; children are also vulnerable. According to a Javelin Strategy and Research report, child identity fraud costs U.S. families nearly $1 billion annually, impacting one in every 50 children.
What is Child Identity Theft?
Child identity theft occurs when someone fraudulently uses a minor’s personal information to commit financial fraud. This often involves information like their Social Security number, health insurance details, 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.”
Why are Children Targeted?
Children are attractive targets for financial criminals because they have clean credit histories. This makes it more difficult to detect identity theft early on. Moreover, since children typically don’t need lines of credit immediately, years can pass before anyone realizes their identity has been stolen.
“The fraudsters have a longer timeline to keep committing the fraud on the same identity,” notes Parul Sharma, senior director of professional services at LexisNexis Risk Solutions.
Risks Associated with Child Identity Theft
Child identity theft can have long-lasting consequences. Its effects can extend well into adulthood, affecting their ability to get a first credit card, student loans, or even employment. Unresolved debts can remain on their credit report for up to seven years. Derigiotis also points out that unresolved delinquent accounts can also lead to legal trouble for the child.
Signs of Child Identity Theft
Although child identity theft can be hard to detect, parents should be vigilant for certain signs. These include:
- Receiving offers for preapproved credit cards.
- Unexplained bills or collection notices in the mail.
- Denial of government benefits due to someone already receiving them in the child’s name. Yaron Litwin, Digital Safety Expert and Chief Marketing Officer of Canopy, a digital parenting app, notes that children receiving notices from the IRS regarding unpaid taxes can also be a sign.
Parents can also be proactive by checking if their child has an active credit report.
Steps to Take if Your Child’s Identity is Stolen
If you discover your child’s identity has been stolen, take immediate action:
- Contact Financial Institutions: Inform any involved financial institutions, businesses, or government agencies to report the identity theft and dispute any fraudulent charges.
- Report to the FTC: Report the identity theft to the Federal Trade Commission (FTC) through identitytheft.gov.
- Contact Local Law Enforcement: Report the identity theft to your local law enforcement agency. Derigiotis explains that “an identity theft report can be used to dispute fraudulent charges.”
- Keep Detailed Records: Maintain “detailed records of all communications and actions taken to resolve the identity theft.”
- Freeze Credit: Request a credit report from each of the three major credit bureaus, review the reports, and then freeze your child’s credit.
Preventing Child Identity Theft
Preventing child identity theft requires proactive measures:
- Limit sharing your child’s personal information unless necessary. “Provide false information about a minor where a full name, address, birth date, and other sensitive information are not legally required,” Derigiotis advises.
- Be cautious about sharing information on social media as social media accounts can be scraped for details.
- If your child has a credit report, contact the three major credit bureaus to request a freeze on the child’s credit report.
- Consider family-based identity theft protection services, including features for minors such as social media monitoring and parental controls.
Jennifer Streaks is a Personal Finance Expert and Journalist who writes about credit and all things money.
