Protecting your children from identity theft
Under-18 identity theft on the rise
Infants responsible for $600,000 mortgages. Teens unknowingly carrying six credit cards in five states. College students unable to get loans because their credit histories were destroyed before they were born.
This is what happens when a child's identity has been stolen.
Most parents don't consider that someone -- most likely someone they know -- could be opening credit accounts in their child's name. Sometimes the criminals are the parents themselves. And these crimes usually go undiscovered until the child applies for a college loan or a job when they're 18, but by then the damage is done -- their identity has been stolen and the bogus credit accounts have been sent to collections.
A 2007 study by Javelin Strategy and Research says that more than 1 million children in the previous year had their information exposed in information breaches. And in many of the cases, thieves snagged the child's Social Security number or birth date and used the numbers to create bogus credit accounts. (See Step-by-step guide to checking your child's credit.)
It's impossible to detail the specifics of each breach. But consider just this one: Ex-Girl Scout troop leader and Floridian Holly Barnes was charged with 19 counts of filing false claims and 15 counts of identity theft last fall after creating fraudulent medical forms for members of her girl scout troop. She then used the information to file bogus tax returns and collect $87,000 in illegal tax refunds, which were then distributed into five different bank accounts, according to the U.S. Attorney's office and documents filed in the United States District Court, North Florida District. This January she was sentenced to 10 years in prison. The breach occurred when parents filled out the fraudulent medical forms.
"It's the climate of our technology age," says Linda Foley, founder of the Identity Theft Resource Center, an agency that helps parents -- and others -- dispute bogus credit charges.
Adds Diane Terry, director of fraud prevention with TransUnion: "Child ID theft isn't anything new. It's been going back a while, however, we do see more and more cases of it."
How to protect your child's identity from being compromised
- Talk to your child about the importance of keeping their personal business private. No "friend" needs to know the child's mother's maiden name, for example. Friends don't need to know Social Security numbers either.
- Monitor your mail. Be suspicious if offers for preapproved credit are addressed to your child.
- Consider making your children "authorized users" on one of your credit cards. This way, you have already established credit for them and you will have greater ease in checking their credit report.
- Don't disclose your child's Social Security number unless absolutely necessary.
- Monitor your child's personal information posted on social networking sites.
- Be sure to keep all subscriptions in a parent's name, not the child's name.
- Educate your child about the importance of keeping personal information -- such as last name, address, etc. -- private when sharing information online.
- Educate your child about unsolicited e-mail scams -- "phishing" e-mails -- that ask for personal information. Be certain that your child knows to ignore and delete fraudulent e-mails.
- Don't allow children to use your credit cards -- especially for online purchases -- without your permission and without your presence.
- No one should keep a Social Security card in a wallet or backpack. Keep your child's card at home.
- Lock up your child's birth certificate, Social Security card and other private information -- especially before you have visitors or caregivers come over.
- Ask your hospital, doctor's offices, libraries, day care centers and schools about their identity protection policies.
A growing problem
There are no comprehensive studies tracking the number of children with stolen identities or adults whose identities were stolen as children, but the Federal Trade Commission reports that 10,835 identity theft complaints were reported on behalf of victims under the age 18 in 2006, up from 6,512 identity theft complaints filed on behalf of the same age group in 2003. A report by Debix Identity Protection Services, a credit monitoring service, also suggests child ID crimes are on the rise, with 5 percent of 500 children showing proof of tampered identity.
"It's not a nationally representative study, but the numbers are holding true," says Julie Fergerson, vice president of emerging technology at Debix and a board member of the Identity Theft Resource Center. Most victims won't learn of the problem until they are old enough to apply for their own credit cards, she says, making the security breaches hard to track.
"It's a new crime, and the kids haven't turned 18 yet en masse so we can't know the total impact," says Fergerson.
With teens potentially giving away too much personal information via popular social networking sites and blogs such as Facebook and MySpace; with unscrupulous parents, uncles and aunts "borrowing" a child's Social Security number and birth records to open up a telephone line or perhaps a department store card; and with school systems, sports teams and mentorship groups asking for copies of sensitive information documents, the opportunity for identity theft is doubling, say these experts.
"What we see most often is someone close to the child. They tend to justify it saying, 'we need it for the child,'" says Terry. "Then it seems to expand from there. We see that quite a bit, where one parent does victimize their own children. We see it quite often with caregivers like foster parents, unfortunately."
Check their credit
How do you find out if your child's identity has compromised? It's not easy and, unfortunately, a minor's credit report can't be checked online. Technically, minors aren't allowed to enter into binding contracts and aren't supposed to have existing, online credit reports. It's further complicated because the thief often applies for new lines of credit using only a child's Social Security number, but not the corresponding name or birth date.
Given this scenario, it is possible for a thief to use your child's name and Social Security number, but a different birthday to open a line of credit. Then, when you attempt to pull an online credit report, instead of being told the report is unavailable because it is affiliated with a minor, you might be told the report is unavailable to you -- likely because all the other identifying characteristics belong to someone who is not your child. This explains why parents using online searches might be told that the credit report is unavailable or the minor is ineligible to receive a credit report.
To get a copy of your child's credit report, parents need to make a request in writing from each of the three credit reporting agencies: Experian, TransUnion and Equifax. It is important to ask that a search include the Social Security number -- not just the child's name and birth date. Again, this is because thieves commonly use the Social Security numbers and then create a new name and an adult birth date.
Be warned, such a request requires you to send the agencies a copy of every piece of information that someone would need to steal your own identity. For example, if you want to order your child's report from Experian, you need to provide birth certificates for both you and your child and copies of your Social Security cards. And, because many instances of child identity theft are brokered by a parent or guardian, the credit reporting agency may still be wary.
"You go to annualcreditrereport.com and request a report and put in their age and you'll get back instructions on how to write for the report," says Maxine Sweet, vice president of public education for Experian, one of the three dominant credit reporting agencies.
At credit reporting bureau TransUnion, parents can send a special e-mail request to the agency. TransUnion then investigates to see if there is a credit file in the child's name. If so, then the parent will be invited to send in more information so they can obtain a copy of the file. If there is no credit file, then the parent will receive an e-mail stating there is no credit file.
The agency is not deluged with requests for the credit reports of minors, says TransUnion spokesman Steve Katz.
"Unless you have a pretty strong suspicion, there isn't going to be a file to check," he says. "Once we confirm that it is a minor and what the situation is, we would go ahead and suppress that file so that it wasn't in any way accessible for use."
Equifax has nearly the same method. Parents should write in with all the important copies of birth documents, Social Security cards and birth certificates or proof of guardianship, plus proof of address (via a bill of some sort) and then Equifax will look up the information.
It is best to determine if there is a potential problem before asking to check your child's credit file. For example, if your child gets credit card offers in the mail or odd phone calls, if there is theft of a school district computer, or if there are unauthorized magazine subscriptions or even a phone bill in the child's name, be warned. At this point, experts say, order the report.
"If they're not a victim of identity theft, they should not have credit," Foley says. "The credit report begins when your first credit card is opened."
Parents can also purchase credit monitoring services for their children. These agencies monitor activity related to the Social Security number, not necessarily the child's name. If they find activity, they can then warn the parent. However, these services often have no way of monitoring if a cell phone, Sam's Club or electricity account has been opened. And, experts warn parents to verify the legitimacy of the credit monitoring service before signing up.
How does it happen?
In July 2008, Tanya Allen, 44, of Reynoldsburg, Ohio, was informed that her teen son's identity could have been compromised due to the theft of a school district laptop. The district paid for her son's credit monitoring service and Allen learned that her son has around $58,000 in bogus debt attached to his Social Security number.
"My husband and I do as much as we can to protect our own identities," says Allen. "We pull our own credit reports, but never once gave a thought to pulling up my son's."
Allen works for a credit agency. She's in the human resources department and is well aware of what a bad credit record can do to a young man just starting out.
"He's about to go to college," says Allen, who has talked with her son several times about the impact of a stolen identity. "He does not know the depth of how this could continue to affect him. He's going to have to get waivers from each one of those creditor stating that this indeed was not him, someone else used this information. "
Allen has since been working with the credit monitoring service to clear her son's name before he applies for college loans.
Even though minors can't legally open up a credit account, the credit reporting agencies and the credit issuers have no way of verifying age, says Experian's Sweet. They take an application -- often rendered online -- at face value. If you say that a certain Social Security number is yours, and they check it and they find that there is no credit history, then they assume that this is your clear credit file. No one assumes that a child's identity may have been stolen.
There is currently no way to fix this system, but several agencies are working to close the loophole, says Identity Theft Resource Center's Foley, who hopes to introduce legislation next year that could mitigate the unverified age situation.
It takes at least several months to clear a child's name, and perhaps longer if the thief is a parent, says Foley. A police report must be filed and a child is typically reluctant to file one if the theft is committed by a family member.
In addition to filing a police report, the parent is advised to file a report with the FTC. The FTC recommends asking the credit bureaus to place a fraud alert on the accounts, close all tampered accounts, and place a credit freeze on the account. With a freeze, all future credit requests will be denied until the child turns 18.
How do you decrease risk?
Teens visiting social networking sites or who are blogging should be educated about what not to say online. Giving out birth dates, home addresses, parents' names and school name is enough for someone to order your child's birth certificate and begin the ID theft process. Crafty criminals also can casually ease this information out of a child through a series of online conversations.
Parents should question whether athletic coaches and mentorship groups like the Girl Scouts really need a physical copy of the child's Social Security number and birth certificate. If medical information is needed, the coach should be instructed to contact the parent, says Foley.
"Ask the question," says Foley. "Why do you need this in order for my child to play youth soccer? Why do you need their Social Security number? It doesn't prove birth or age and no, I'm not giving you a copy of their birth certificate. We need to learn to say no a little bit more firmly and in more circumstances."
See related: Step-by-step guide to checking your child's credit, 10 ways students can protect against identity theft, Identity theft sample letters, Credit card users can take steps to protect themselves from identity theft
- Credit freezes are now free – but do you need one? – Credit freezes, which keep lenders and other companies from viewing your credit, are now free. We compared them to other credit protection tools, including locks and monitoring services. Here's how to use them all to protect yourself ...
- Employer credit checks: Who does them, how they work and what laws apply – If you're applying for a new job, a credit check could determine your fate, depending on the position and where it's based. Here's how they work and what to expect ...
- My card issuer of 25 years suddenly wants to know more about me – Under the Patriot Act, banks are required to verify the identities of their customers and maintain accurate information on them. But my bank's demand to know how I earn my income is an invasion of my privacy ...