By Barbara O’Neill, Ph.D., CFP®, AFC firstname.lastname@example.org
The statistics are startling.
According to a survey by Javelin Strategy and Research, more than one million children, two-thirds of them age 7 or younger, were identity theft victims in 2017. More than one million children!
Even more shocking: 6 in 10 child victims knew the perpetrator compared to just 7% of adults. Family friends were the most common perpetrator and they accounted for 33% of responses to the survey question “Who do you believe misused your dependent’s information?” Partner/spouse ranked second with 18% of responses.
As author and April MFLN Personal Finance team webinar presenter Dr. Axton Betz-Hamilton notes in her book, The Less People Know About Us, it can take decades for child identity theft to be discovered (she found out at age 19) and even parents can be the fraud perpetrator. In Betz-Hamilton’s case, her own mother stole her personal identification information (PII) as well as savings set aside for her college tuition.
Dr. Betz-Hamilton shares her expertise on child identity theft on April 21st in a free webinar. RSVP to attend live and get details at militaryfamilieslearningnetwork.org/event/61140/
Why are so many children- even newborns- a target for identity theft?
One reason is that children’s personal identification information or PII is a “blank slate.” Social Security numbers are issued at birth kids have no other history so criminals use them to create fake identities to establish lines of credit and go on shopping sprees.
A second reason is access, especially in cases of fraud committed by family members and friends.Many adults have access to kids’ PII and they may also know key information about a child such as an address and birth date.
A third reason is familiarity. People have a hard time believing that someone close to them could harm their children and so many are hesitant to contact law enforcement to address the problem.
What can be done?
What can parents do to reduce their risk, and the risk of their child, of becoming an identity theft victim? Here are recommendations from fraud prevention experts:
Lock Up Your Data
Keep documents with sensitive information (e.g., bank and investment account numbers, Social Security numbers, checkbooks, tax returns, and Medicare and health insurance numbers) in a file cabinet that is locked whenever you are away from home or have guests, even friends and family, or babysitters, cleaners, contractors, and utility company installers in your house.
Leave Lines Blank
Skip the space for listing a Social Security number on forms required for summer camp, school registration, doctor’s offices, and other places. It is usually not required, and you will generally not be hassled for not providing it. The goal is to have as little of the child’s data – and yours – “out there” as possible, where it can potentially be misused for fraudulent purposes.
Freeze Your Child’s Credit
Take advantage of a federal law that allows you to freeze your child’s credit, as well as your own, for free. Freezing credit prevents creditors from accessing a person’s credit history and extending new credit. To freeze a child’s credit, parents must provide a written request along with a birth certificate or other document proving parentage and identification for the child such as copies of a certified birth certificate, driver’s license, passport, or Social Security card. Allow several weeks for processing.
Heed Red Flags
Pay attention to evidence that a child might have a fraudulent credit history unbeknownst to them and the rest of their family. For example, take note of any collection calls, mail from creditors, and pre-approved credit card offers that are typically sent to adults with credit. If those come addressed to a child consider that a major tip-off. Also, banks check credit reports to open new accounts and they might find evidence of fraud when a child tries to open a savings account.
Monitor Your Child’s Credit
Periodically request a credit report for your child to see if any data appear as you review your own credit history. You can use annualcreditreport.com to order reports from the “Big Three” credit bureaus. Also consider a family identity theft monitoring plan, especially if your PII was one of those stolen in one of several recent high-profile hacks or one of your child’s social media accounts has ever been hacked.
By following these recommendations we can reduce the risk of more children becoming identity theft victims.
For more information about child identity theft, visit the FTC Child Identity Theft website at www.consumer.ftc.gov