Childhood identity theft is a real thing and it is happening everyday. If you are ever going through the mail and receive something that is intended for an adult with your child's name on it, a red flag should be going off. This more times than not means your child has been the victim of identity theft. Even worse, many times the crime is being committed by someone close to the child. Even though this is all a scary thought, there are steps you can take to protect your child's identity and future credit.
Children are easy targets for thieves since they are not using their credit. With that being said, child identity theft does look different than adult identity theft. In most cases of adult identity theft, you are looking at someone fraudulently using someone else’s bank account, credit card or some other existing accounts. A very small percentage actually involves opening a new account.
You can pretty much expect the opposite with children. New accounts tend to be the most common type of identity theft. More times than not, their Social Security Number (SSN) will be used illegally. Here is a list of things a thief may do with a stolen SSN:
To make matters worse, identity thieves can take the SSN and put it with a fake name and birth date, essentially creating a new identity. This type of crime is known as “synthetic identity theft” and is actually not so easy to detect. More times than not, you may not find out this has happened until the child has reached 18 and they are trying to establish credit. Their credit report is pulled and it has someone else's name on it with a laundry list of credit items.
As terrible a crime as this is, a law was passed in May 2018, called the Economic Growth, Regulatory Relief, and Consumer Protection Act, This act helps address the issue of synthetic identity theft. Although not full proof, it requires the Social Security Administration (SSA) to create a new database that banks will use to check any customer’s name, date of birth, and SSN when they apply for a new account. The only negative is that it does not require the bank to check this info before opening an account.
Since child identity theft is hard to detect, there are red flags to keep a look out for per the Federal Trade Commission (FTC):
With child identity theft on the rise, here are the steps the FTC and other experts recommend to keep your kids safe.
1. Check for a Credit Report - Children don't have one since they only are created if someone has applied for credit. Contact the three credit bureaus – Equifax, Experian, and TransUnion – and request a manual search of your child’s file. They can check for just the SSN number too. You will need to provide proof of identity so make sure to have your child’s birth certificate and Social Security card, your own driver’s license or other legal ID, and proof of address.
Bonus tip: Even without any red flags, it is a good idea to check your child's credit when they turn 16. By doing this, if there is an issue, you can report the fraud and have time to correct it before they really need to start using their credit. Also note that if you opted your child out of receiving pre-approved credit card offers, a credit file will be opened in their name. So don't get too freaked out off the bat if your child has a report in their name. You are unable to delete the file but you can request that they put a freeze on their credit.
2. Protect Your Child’s Personal Information -
3. Be Aware of Risks
Know the risky events to keep an eye out for:
4. Consider a Credit Freeze
Since your kids will not be applying for credit any time soon, consider freezing their credit reports. This will ensure that thieves can’t use their names to borrow money. The process is a little lengthy but worth it. Go to the three bureau websites ( Equifax, Experian, and TransUnion) and they have a complete list of the required documents, along with the address to mail them to.
Now this will not protect them 100%. Thieves can still use your child’s SSN to obtain medical care, apply for government benefits, get a job, or file taxes.
5. Talk to your kids
Kids can sometimes let valuable information slip to people they don’t know well. Educate your kids about the importance of protecting their personal information. Here are a few things to teach them:
After the initial shock goes away, it is time to take action.
Here are the basic steps to take if your child has been the victim of identity theft:
1. Get Your Child’s Credit Report - Contact the three credit bureaus, as mentioned above. If your child has one in their name, check for any fake accounts.
2. Report the Crime - File an Identity Theft Report by going to IdentityTheft.gov or calling 877-ID-THEFT. If someone used your child’s SSN to file taxes, report that crime separately using the IRS Identity Theft Affidavit (Form 14039).
3. Contact each company - Every company that has an account opened in your child's name should be contacted. Let them know the account is fake and that you want the account closed. Also request that they send you a letter of confirmation that you will not be liable for any charges applied to the account. After that, send the company a follow-up letter with copies of your child’s birth certificate and the Identity Theft Report. Keep ongoing notes on who you have contacted and the status with each.
4. Clean Up Their Credit Report - When you get your child’s credit report, it comes with instructions for getting fraudulent accounts removed. Keep in mind each bureau has its own procedures.
5. Freeze Your Child’s Credit - Once you have the fake accounts removed, set up a credit freeze to ensure the thieves can’t open any new ones. Under federal law, parents have the authority to freeze their child's credit report if they are under the age of 16 for free. Teenagers 16 and older can freeze their own credit.
As parents, our job is to protect our kids from any harm. Identity theft is a crime that is not at the forefront of most parents' minds but it should be. It is a real threat and can wreak havoc for years to come. Being vigilant about safeguarding your kid's personal information while they’re young will help ensure their credit stays in good standing. In addition, teaching them about online security and privacy as well as how to keep their own personal information safe will help them develop good habits as they grow older.