Child identity theft is a growing problem that often flies under the radar of parents and caregivers. While adults are increasingly aware of the need to protect their own personal information, many fail to realize that children can also be victims of identity theft - with potentially devastating long-term consequences. This article will explore the alarming rise of child identity theft, how it happens, warning signs to watch for, and critical steps parents can take to safeguard their children's identities and financial futures.
The Alarming Rise of Child Identity Theft
Child identity theft has become increasingly prevalent in recent years. According to Javelin Strategy & Research, over 1.3 million children fall victim to identity theft annually, resulting in losses of $2.6 billion. Even more concerning, children are 51 times more likely than adults to be victims of identity theft.
Why are children such appealing targets for identity thieves? There are several key reasons:
- Children's Social Security numbers and personal information are often "clean slates" with no existing credit history, making them attractive to criminals looking to open new fraudulent accounts.
- Parents rarely check their children's credit reports or monitor their Social Security numbers for suspicious activity.
- Child identity theft can go undetected for years, sometimes not discovered until the child becomes an adult and applies for credit.
As Steve Weisman points out:
"Child identity theft is a serious problem that often goes undetected for years until the child becomes an adult and applies for credit only to find that his or her credit has been destroyed."
This long period before detection gives criminals ample time to exploit a child's stolen identity, potentially racking up significant debt or engaging in other fraudulent activities.
How Child Identity Theft Occurs
There are several common ways that criminals obtain and misuse children's personal information:
Data breaches: Large-scale data breaches at schools, healthcare providers, and other organizations that store children's data can expose sensitive information to criminals.
Family fraud: Unfortunately, a significant portion of child identity theft is perpetrated by family members or close acquaintances who have easy access to a child's personal information.
Social engineering: Scammers may use phishing emails, phone calls, or other tactics to trick parents or organizations into divulging children's personal data.
Dumpster diving: Carelessly discarded documents containing children's information can be a goldmine for identity thieves.
Online oversharing: Parents who post excessive details about their children on social media may inadvertently provide criminals with key information needed for identity theft.
Once obtained, a child's stolen information can be used in various ways:
- Opening credit card accounts
- Taking out loans
- Renting apartments
- Obtaining government benefits
- Creating fake IDs
- Even committing crimes under the child's identity
Warning Signs of Child Identity Theft
Because child identity theft often goes undetected for years, it's crucial for parents to be vigilant and watch for potential red flags. Some warning signs that your child's identity may have been compromised include:
- Receiving pre-approved credit card offers in your child's name
- Collection calls or bills addressed to your child
- Notification from the IRS about unpaid taxes in your child's name
- Denial of government benefits because they're already being claimed under your child's Social Security number
Steve Weisman emphasizes the importance of staying alert:
"Parents should be particularly wary if they receive notifications from the IRS regarding income taxes owed by their child or if they receive notices that government benefits are being denied to their child because those benefits are already being paid to another account using their child's Social Security number."
The Long-Term Impact of Child Identity Theft
The consequences of child identity theft can be severe and long-lasting. Some potential impacts include:
Damaged credit: By the time the theft is discovered, the child's credit may already be in ruins, making it difficult to obtain loans, rent apartments, or even get a job as an adult.
Financial losses: Victims and their families may face significant costs to clear fraudulent debts and restore credit.
Emotional distress: Discovering one's identity has been stolen can be traumatic, especially for young adults just starting out in life.
Legal issues: In some cases, crimes committed under a stolen identity can lead to legal troubles for the victim.
Lost opportunities: Poor credit can limit educational and career opportunities well into adulthood.
Weisman notes the potential for long-term damage:
"The effects of child identity theft can be devastating and long lasting. It can take years to straighten out the mess left behind by an identity thief who has used a child's Social Security number and other personal information to obtain credit, get a driver's license, secure employment or even commit crimes."
Critical Steps to Protect Your Child's Identity
While the threat of child identity theft is serious, there are proactive measures parents can take to safeguard their children's personal information:
1. Freeze your child's credit
One of the most effective ways to prevent child identity theft is to place a security freeze on your child's credit file. This makes it much harder for criminals to open new accounts in your child's name. As Weisman advises:
"The best thing you can do to protect your children from becoming victims of identity theft is to put a credit freeze on your child's credit report at each of the three major credit reporting agencies, Equifax, Experian and TransUnion."
2. Be cautious about sharing personal information
Limit the disclosure of your child's personal information, especially their Social Security number. Question why it's needed when asked and only provide it when absolutely necessary.
3. Securely store important documents
Keep birth certificates, Social Security cards, and other sensitive documents in a secure location, such as a locked file cabinet or safe deposit box.
4. Educate your children about online privacy
Teach kids about the importance of protecting their personal information online and the potential risks of oversharing on social media.
5. Regularly monitor your child's credit report
While children under 18 typically shouldn't have a credit report, it's wise to check periodically to ensure no fraudulent accounts have been opened.
6. Use strong, unique passwords
Protect online accounts containing your child's information with strong, unique passwords and enable two-factor authentication when available.
7. Be wary of phishing attempts
Exercise caution with unsolicited emails, calls, or messages requesting personal information about your child.
8. Properly dispose of sensitive documents
Shred or securely destroy any documents containing your child's personal information before discarding them.
9. Consider identity theft monitoring services
Some identity protection services offer specific plans for monitoring children's identities for signs of fraud.
Taking Action if Your Child's Identity is Stolen
If you suspect your child has become a victim of identity theft, take these steps immediately:
- File a police report
- Contact the three major credit bureaus to place a fraud alert
- File a complaint with the Federal Trade Commission
- Notify any companies where fraudulent accounts were opened
- Consider working with an identity theft resolution service
Weisman emphasizes the importance of acting quickly:
"If you believe your child has become a victim of identity theft, it is important to act quickly to limit the damage. File a police report and contact each of the three credit reporting agencies to place a fraud alert on your child's credit report."
Child identity theft is a serious and growing threat that can have devastating long-term consequences for victims and their families. By understanding the risks, staying vigilant for warning signs, and taking proactive steps to protect children's personal information, parents can play a crucial role in safeguarding their children's financial futures.
Remember, an ounce of prevention is worth a pound of cure when it comes to child identity theft. Take action now to secure your child's personal information and regularly monitor for any signs of suspicious activity. By doing so, you can help ensure that your child's bright future isn't derailed by the hidden danger of identity theft.
