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Proposed rule could help kids replace stolen Social Security numbers

Change would ease process for young victims of identity theft

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With identity theft rising, the federal government is considering making it easier for young victims to receive new Social Security numbers.

Such a move could help tens of thousands of children whose numbers have been stolen by thieves to obtain credit cards, legally hold a job and collect fraudulent tax refunds -- sometimes for years without detection. 

child-identity-theftChildren represent particularly alluring prey for fraudsters, because typically nobody checks credit reports associated with their Social Security numbers until the child is a teenager. A 2011 study by Carnegie Mellon University CyLab estimated that 10 percent of children have had their Social Security numbers used by someone else -- a rate 51 times higher than that of adults.

"Children are a much more lucrative target," says Robert Chappell, a Virginia State Police lieutenant and author of the book, "Child Identity Theft: What Every Parent Needs to Know." "You could victimize them at birth and misuse their credit for 18 years before they find out about it."

Rule change considered
Adults and children seeking new Social Security numbers today must show they were "recently disadvantaged" by an unauthorized person using their identity. The Social Security Administration signaled early in 2013 it was considering lowering that bar and might change its policy to allow new numbers for children 13 and under in certain circumstances. The comment period ended in April. The Social Security Administration says it has no timetable for a decision.

Under the proposal, the agency would issue a new number when parents could show that the old one was stolen from the mail, publicly disclosed in error by the Social Security Administration or misused by a third party -- but they wouldn't have to show they suffered harm.

So, for instance, if somebody fraudulently provided a child's Social Security number for employment, the child could receive a new Social Security number before any fraudulent activity showed up on a credit report.

In a letter to the Social Security Administration, a mother from California said the proposal would help her 5-year-old daughter, whose number was used to file a fraudulent tax return.

Protecting your child from SSN fraud

    There are a number of steps parents can take to reduce the odds that their children will be victims of identity theft:

  • Keep your child’s Social Security number safe. Don’t put the number on forms that don’t need it, and keep your records in a safe place.
  • Check your child’s credit report. Experts advise doing this around age 16, when there is still time to correct errors or fraud.
  • Ask credit agencies for a "manual search" of your child’s Social Security number. This will flag any suspicious activity from people using your child’s SSN but with different names or dates of birth.
  • Consider a credit freeze. Credit agencies can ensure that nobody accesses a particular credit report, which means that a fraudster cannot open new accounts in the child's name. Details vary by state.
  • Use a credit monitoring service. For a fee, any of a number of companies will alert you to suspicious credit report activity.

  • For more information and tips, visit the Identity Theft Assistance Center or the Federal Trade Commission's child identity theft page.

     

"The regulation would make a difference in that we wouldn't have to wait until there was actual damage to her credit to request a new number," she wrote. "We already know that there has been a theft, it's already been used fraudulently, and without the ability to start fresh, there is no way to prevent fraud from occurring."

Few oppose
Many responses to the Social Security Administration supported the change. The Federal Trade Commission and the Justice Department said they support the idea, though they suggested raising the age of those eligible for new numbers to 18 and under, since many identity-theft victims might not realize they've been victimized until they start their first jobs.

Other supporters included child-welfare agencies and foster care advocates.

One of the few opponents was a representative of LifeLock, an identity-theft protection company, who said placing more numbers into circulation would be confusing and could exacerbate fraud, since roughly two-thirds of people who misuse children's Social Security number are the child's parents.

The proposal is unlikely to end the practice of stealing and using children's Social Security numbers, says Jamie May, vice president of customer service with AllClearID, a company that monitors customer credit reports for fraud.

She says she sees dramatic consequences of stolen numbers, such as one teen who found out upon applying to college that her credit report showed she owed $750,000. The girl had to delay entering college until she straightened out the mess.

"The harm is really in the missed opportunities -- waiting a semester to enroll in college, or not being able to move out of their parents' house or get a job," she says.

Some states have passed laws that make it easier to freeze kids' credit files, says May. She would like to see credit agencies use some other way to verify identity besides just checking that a person used a valid Social Security number. The number was never intended to be used to establish credit.

Still, receiving a new number would be a "valuable tool for kids who have serious problems," she says.

See related: Child identity theft rising quickly, report says, Protecting your children from identity theft, Step-by-step guide to checking your minor child's credit

Published: May 16, 2013



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