Child Identity Theft: A Crisis of Unchecked Vulnerability
Children in the United States are increasingly becoming victims of identity theft, a crime with the potential to inflict long-lasting damage. Although minors cannot independently obtain credit or open accounts, they are still exposed to the risk of having their identities stolen, which can result in poor credit scores or, more alarmingly, criminal records.
The Scope of the Problem
Identity theft targeting children has reached alarming proportions. Research conducted by Experian revealed that as many as 25% of children will be victims of identity theft or fraud by the time they turn 18. The repercussions for victims can be devastating: Over half of the children who experience identity theft report being denied access to credit, and some suffer the consequences for a decade or even longer. In the most extreme instances, identity theft can saddle children with lifelong criminal records for offenses they did not commit.
The Government: Failing to Protect the Most Vulnerable
The prevalence of child identity theft raises serious questions about the federal government’s responsibility to protect citizens, especially minors. The Social Security Administration (SSA) and the Internal Revenue Service (IRS) bear the brunt of the blame.
- Social Security Administration (SSA): The SSA’s practice of issuing Social Security numbers (SSNs) without verifying their history poses a significant problem. With most SSNs already assigned, a fraudulent number is likely to belong to an existing person, or a child. Because the SSA does not check the details of SSNs prior to issuing them, it may assign numbers with histories of fraud to babies.
- Internal Revenue Service (IRS): The IRS is legally mandated to alert parents when their children’s identities have been used for tax fraud, but it consistently fails to do so. This lack of action has persisted despite pressure from the Treasury Inspector General for Tax Administration. The National Taxpayer Advocate has reported “unconscionable” delays when individuals seek help from the IRS to resolve identity theft.
- Foster Care System Vulnerabilities: Furthermore, children in foster care are at heightened risk due to increased access to their confidential information. While federal law mandates credit checks for foster youth aged 14 and older, compliance with this regulation is poor. A majority of these children did not receive the required credit checks in 2021, and few of those who did received effective assistance in understanding their reports.
Straightforward Solutions
The solutions to this widespread issue are, by comparison, straightforward, and can be implemented by a number of governmental agencies.
- Congress should require the SSA to verify SSNs prior to issuance. The SSA could achieve this by collaborating with credit bureaus or federal agencies like the FBI.
- The IRS must be compelled to fulfill its legal obligation. Congress must step in to ensure that the IRS alerts parents when their children’s identities are stolen as required by law.
- Consider the option of automatically freezing children’s credit accounts. This step would offer an additional layer of protection for minors. At the very least, the government should improve the process by which guardians can freeze their children’s credit files. Such a program would allow credit agencies to help those families.
- Reform needs to be brought to the foster care system. The Department of Health and Human Services Office of Inspector General has created a valuable report outlining the problems with performing credit checks for foster youth. Policymakers must adopt the report’s recommendations.
Conclusion
Identity theft can inflict severe damage, and the responsibility for addressing it falls squarely on the federal government. By enforcing existing policies and building on previous initiatives, the government can play a crucial role in protecting children.
