[UNITED STATES] Protecting your child's identity has become as crucial as ensuring their physical safety. Child identity theft is a growing concern, affecting one out of every 50 children and costing US families nearly $1 billion annually. As parents, it's essential to understand the risks, recognize the warning signs, and take proactive measures to safeguard your child's financial future.
Child identity theft occurs when someone fraudulently uses a minor's personal information for financial gain. This can include using a child's Social Security number, name, or date of birth to open credit accounts, apply for loans, or even claim government benefits.
David Derigiotis, a Certified Information Privacy Professional, explains, "Children's identities are valuable to financial criminals because children have clean credit histories". This clean slate makes it easier for fraudsters to open new accounts and harder for parents or guardians to detect the theft.
Why Children Are Targeted
Children are particularly vulnerable to identity theft for several reasons:
- Clean credit histories
- Longer timeline for fraud to go undetected
- Lack of regular credit monitoring
Parul Sharma, senior director of professional services at LexisNexis Risk Solutions, notes, "The fraudsters have a longer timeline to keep committing the fraud on the same identity". This extended period of undetected fraud can lead to severe consequences when the child reaches adulthood.
The Risks and Consequences of Child Identity Theft
The impacts of child identity theft can be far-reaching and long-lasting. Some potential consequences include:
- Difficulty obtaining credit cards or loans in adulthood
- Challenges securing student loans for higher education
- Potential employment issues due to poor credit history
- Legal troubles from unpaid debts and collections
- Emotional distress and financial burden
Unresolved identity theft can leave a trail of unpaid debts, delinquencies, and collection accounts that can affect a child's credit report for up to seven years. This negative credit history can significantly impact a young adult's ability to start their financial life on solid footing.
Warning Signs of Child Identity Theft
While child identity theft can be challenging to detect, there are several red flags parents should be aware of:
- Receiving pre-approved credit card offers in your child's name
- Unexplained bills or collection notices addressed to your child
- Denial of government benefits due to the benefits being paid to another account using your child's information
- IRS notices regarding unpaid taxes in your child's name
- Calls from debt collectors about accounts you don't recognize
Yaron Litwin, Digital Safety Expert and Chief Marketing Officer of Canopy, advises parents to be vigilant: "Another sign is a child receiving a notice from the IRS regarding unpaid taxes".
Proactive Measures to Protect Your Child's Identity
Prevention is key when it comes to child identity theft. Here are some essential steps parents can take to safeguard their child's personal information:
1. Limit Information Sharing
Be cautious about sharing your child's personal information, especially their Social Security number. Only provide this information when absolutely necessary and verify the legitimacy of the request.
2. Secure Important Documents
Keep your child's birth certificate, Social Security card, and other important documents in a secure location, such as a locked file cabinet or safe.
3. Educate Your Child
Teach your child about the importance of protecting their personal information, especially online. Instruct them never to share sensitive details like their full name, address, or birthdate on social media or with strangers.
4. Monitor Your Child's Online Activity
Use parental controls and monitoring software to keep track of your child's online activities. This can help prevent them from inadvertently sharing sensitive information.
5. Be Cautious on Social Media
Avoid sharing detailed personal information about your child on social media platforms. Derigiotis warns, "Social media accounts can be scraped for key details, and countless data breaches have occurred, which provide a treasure trove of sensitive personally identifiable information that can be used for identity theft".
6. Check for a Credit Report
Regularly check if your child has a credit report. Derigiotis explains, "Children under 18 typically will not have open and active credit histories". If you find an active credit report for your child, it could be a sign of identity theft.
7. Freeze Your Child's Credit
Consider placing a security freeze on your child's credit file. This makes it more difficult for criminals to open accounts in your child's name. Sharma recommends, "Contacting the three major credit bureaus to request a freeze on the child's credit report".
8. Use Identity Theft Protection Services
Consider signing up for a family identity theft protection service that includes coverage for minors. These services often provide features like social media monitoring and alerts for suspicious activity.
Steps to Take If Your Child's Identity Is Stolen
If you discover that your child's identity has been compromised, take immediate action:
- Contact financial institutions and government agencies to report the fraud and dispute any charges.
- File a report with the Federal Trade Commission (FTC) at identitytheft.gov.
- Report the theft to local law enforcement.
- Request credit reports from all three major credit bureaus.
- Place a credit freeze on your child's credit file.
- Dispute any fraudulent information on the credit reports.
Derigiotis advises, "Keep detailed records of all communications and actions taken to resolve the identity theft".
The Importance of Ongoing Vigilance
Protecting your child's identity is an ongoing process that requires constant vigilance. Sharma recommends that parents check their child's credit report twice a year. By staying proactive and informed, you can significantly reduce the risk of your child becoming a victim of identity theft.
Child identity theft is a serious concern that can have long-lasting consequences for your child's financial future. By understanding the risks, recognizing the warning signs, and taking proactive measures to protect your child's personal information, you can help safeguard their identity and set them up for a secure financial future.
Remember, prevention is always easier than recovery when it comes to identity theft. Stay vigilant, educate your child about the importance of protecting their personal information, and don't hesitate to take action if you suspect your child's identity has been compromised.
By following these guidelines and staying informed about the latest identity protection strategies, you can help ensure that your child's personal and financial information remains secure in an increasingly digital world.
