Most of the time, parents don't even think to check their child's credit report. But by the time the child graduates from high school, it could be too late.
Here's a scenario: "You just graduated from high school, you've turned 18 years of age, and you have plans to go to college. You can't because somebody has already put you $70,000 into debt," says Jay Foley, executive director of the Identity Theft Resource Center in San Diego.
Foley says the process to clear up the fraud could take up to two years and make it hard for a young person to get credit, rent an apartment or find a job.
"Remember, you're badly in debt and most of the stuff will probably already be in a collection, which means that most employers are going to look at you as a bad potential employee," he says.
"Right off the bat, you're behind the eight ball."
To complicate matters, teens and young adults are among the least likely to take steps to prevent identity theft.
"I think what you have is the stereotype about young people taking more risks," says James Van Dyke, president of Javelin Strategy & Research. "We've found that they take two times the average risk as other demographic groups."
Van Dyke says part of the problem is that young adults simply conduct more transactions using credit cards and are more likely to use online banking, often with an unprotected computer.
In addition, teens are increasingly using social networking sites such as MySpace and Facebook to create blogs and post photos, videos and music. A 2007 report by the Pew Internet & American Life Project concluded that 55 percent of all online teens had a profile on a social networking site.
When teens put too much personal information out in the virtual world, they give real-world con artists the opportunity to steal their identities.
software, which allows users to
download music and videos, is
particularly risky, experts say.
"The biggest identity theft threat posed by peer-to-peer software such as LimeWire, etc., is that people who use it don't often realize that they have documents with sensitive information in the same folders as the files that they are sharing with the world," says Paul Ferguson, network architect with Trend Micro, an Internet security solutions provider.
"Unfortunately, these sensitive documents often end up in the wrong hands," he says.
The cell phone is another conduit for identity theft when conversation is between a young person and his or her bank or credit card company -- particularly when it is within earshot of a fraudster.
"Hanging around at airports, riding trains or anywhere in public, you'll find people calling their banks and credit card companies on cell phones and talking loudly just to be heard," says Jamz Yaneza, research project manager at Trend Micro.
Yaneza says he's heard young people openly dictating their credit card numbers and Social Security numbers over a cell phone in public. He says it's safer to go online or wait until you can make the phone call in privacy.
There's also a higher risk to young adults due to their transient nature. The college lifestyle, with frequent moves to new dorms and proximity to new roommates, can take its toll on the blithely unconcerned college student.
Van Dyke says college students are notorious for leaving doors unlocked, computers unsecured and credit card bills in plain sight of potential thieves -- behaviors that invite trouble.
"If you have roommates, you should always keep paper statements under lock and key," he advises. "Paper is a risky financial document. Six percent of all ID fraud comes from paper documents."