OK, maybe you aren’t kicking back in your down-time and thinking about the finer points of child identity theft. But if you haven’t been paying much attention to the growing number of horror stories featuring starry-eyed young people who try to rent their first apartment, open their first credit card, or buy their first car and get denied because they have mountains of debt—you should. It may not happen to your son or daughter, but as this particular strain of financial crime spreads and morphs, there will be innovations, the vector will widen, and hundreds of thousands, if not millions, more victims will be ensnared. One thing is as certain as the fact that breaches have become the third certainty in life: Child identity theft has elbowed its way into our lives.
We’ve been talking about the 2012 Child Identity Fraud Report for a while now. It clearly showed the rise in child identity theft cases. While only one in 40 children became victims of identity theft—the rate is much higher among vulnerable children, like those in foster care (because too many people have access to too much information)—it should be an area of concern for all parents. At issue in the Identity Theft Assistance Center study—and the reason that keeps a whole lot of us up at night—is not the “what” but the “who” of these crimes. The most common perpetrators are close friends of the family or relatives, which makes this crime incredibly difficult to detect and control.
The ITAC study found that 71% of child identity theft cases were committed by relatives or friends: 35% of the former and 36% of the latter. The fraudster only needs to be close enough to get your basic personally identifying information, and your child’s Social Security number. The allure of a child’s Social Security number is that it is rarely required and certainly isn’t monitored by them (and almost never by their parents), and therefore can be priceless to a thief who knows what to do with it.
What Can You Do?
Be careful. Keep sensitive documents somewhere secure, preferably in a safe or a bank box. Before you post hundreds of adorable pictures of your kids on Facebook or Instagram (or pictures of sensitive documents that double as milestones), or insider facts about Susie or Johnny that you absolutely must share with friends and relatives, understand that this is a kind of currency to those who would exploit your child’s personal information for their gain. Currency they can use immediately or save for a more opportune moment. Then contemplate the time frame that they can operate under the radar and the amount of damage they can do that may well go undetected for months or years. The survey found that, on average, it took 334 days to detect child identity theft, and 44 hours to resolve the case. Almost 20% of the total cases studied involved crimes that continued for more than a year.
How to Check Your Child’s Credit Report
In most cases, your child should not have a credit report – that is, until credit is taken out in his or her name. So if you get a call or a notice from a creditor regarding your child, or an invitation for them to apply for a credit card shows up in the mail (email or snail), don’t dismiss it as a mistake. Frankly, if you never see or hear anything that arouses your suspicions, you owe it to your kids to check their credit report, or more to the point: you owe it to them to make sure that their credit report doesn’t exist. (While you’re at it, you should make sure to check your own credit reports, which you can do for free once a year. Beyond that, use free credit tools at sites like Credit.com, which provides you access to two free credit scores, updated monthly, along with information about why they are what they are, and what you can do to improve them.)
It’s not the easiest thing to do, but it’s well worth it. Be ready to provide each of the three major credit reporting agencies (Experian, Equifax and TransUnion) with not only your child’s name, address and date of birth, but also a copy of his or her birth certificate and Social Security card. They’ll need copies of your driver’s license (or similar proof of your identity with the same address) and a utility bill showing that your address is still current. If all goes well, it will be for naught—literally. If there is no credit report, your child’s financial future awaits them in the form of a blank slate.
Mother’s Day and Father’s Day can provide more than a little rest and relaxation. They provide an occasion to celebrate the things you got right as a parent, and also reflect upon the things you might like to do better. With the evolution and growth of child-related identity theft, it’s time to rise to this new parenting challenge.