You try to protect your kids in every way possible, with bicycle helmets, healthy meals and safe surroundings. Few parents realize that of all the dangers out there, their children’s identity is uniquely vulnerable. Their financial history is a blank slate, and they never check their credit score.
Identity fraud is a serious problem, with 13.1 million victims in 2015, according to Javelin Strategy & Research. An earlier Javelin report focusing on child identity theft estimated that 1 in 40 U.S. households with children under age 18 had at least one child whose personal information had been compromised by identity criminals.
Thieves can use your child’s private information to open bank accounts and credit cards, rent an apartment, start a new job, apply for utilities, access benefits such as welfare and unemployment, take out major loans and commit crimes — all under your child’s name.
These actions can haunt your children into adulthood, preventing them from obtaining student loans, employment or housing, and burdening them with many other troubles. Take these steps to protect them from identity theft.
Your child’s Social Security number can be a huge prize for identity thieves. With it they can create a new identity, set up credit accounts and start racking up debt.
Credit reports aren’t supposed to be set up for minors, but this detail often slips through the cracks, says Steve Weisman, an attorney who blogs about scams and ID theft at Scamicide.com.
Identity thieves lie about age, and according to Scott Mitic, former CEO of the identity protection and privacy service TrustedID, “There is not a single way in that space to be definitive about the age of the individual creating the report.”
You are your child’s key line of defense, so don’t carry your kid’s Social Security number around in your wallet. If you mail documents with your child’s personal information, drop it in a secure mailbox. Shred documents with this identifying information.
Share your child’s Social Security number only when absolutely necessary. When extracurricular groups ask for it, see if they’ll accept an alternative identifying number. “Social Security numbers typically don’t need to be shared unless there are tax implications,” according to TrustedID.
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Limit personal information exposure
Details such as your child’s full name, address and date of birth can be enough to get an identity thief started.
“Your kid’s information is often in circulation in all sorts of ways,” says Melinda Opperman, chief relationship officer at Springboard Nonprofit Consumer Credit Management.
So, limit the personal information you and your child share on social media. In addition, don’t sign up for unnecessary accounts such as magazines, mailing lists or frequent flier programs, because your child’s information will be sold to marketers.
At doctors’ offices, write down personal details for the receptionist. Some thieves lurk in the lobby and listen for those few telling bits.
At school, your child’s information is likely in a directory that could be shared with third parties. Under the federal Family Educational Rights and Privacy Act, parents have the ability to opt out of that information sharing. But parents need to actively opt out.
“That’s a really important thing to do,” says attorney Weisman. “A lot of times, parents aren’t really aware that they have that right.”
Most people are surprised to learn that identity theft is typically “a family affair,” says Weisman. Family, or anyone else with access to your home, can nab these details just by nosing around.
Because identity thieves are often family members, it can feel “like a horror story where the call is coming from inside the house,” says Joel Winston, a New York-based attorney specializing in privacy law.
“Child identity thieves who know their victims rationalize that the use of credit is just temporary and will be paid back without the child ever knowing,” Winston says. “Other thieves feel that if the money is being used to take care of the child, then it’s justified to use the child’s credit.”
The financial consequences can be severe, as thieves can “churn and burn” through the child’s credit history quickly, he says. “Whereas an adult with existing credit accounts might be flagged by an avalanche of new accounts, a thief can abuse a child’s pristine credit report for 5 to 15 days before new accounts start registering and credit limits are flagged.”
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Ask about privacy protection
“You just need to be an advocate for your child,” says Opperman. Ask companies to provide details about how they store, protect and dispose of private information.
The answer can be very telling, says Weisman. “There are a lot of businesses, and particularly smaller businesses, that just don’t put enough effort and funding into securing their data.”
So when you ask, listen to how businesses respond. Dead air is a red flag; you don’t want to do business with them.
An immediate response detailing the steps they’ve taken to protect privacy — encrypted data, privacy training for employees, limits to information access — is a good sign. This is an important step to take, says Weisman, adding that small businesses are the “low-hanging fruit” that hackers are targeting.
“You’re only as safe as the weakest place that holds it,” he says.
Watch for preapproved credit cards, bills for unfamiliar services or unexpected medical collection notices, all in your child’s name, says attorney Winston. He also warns that you should be alarmed if you or your child gets rejected for government benefits because those benefits are being paid to another account using your child’s Social Security number.
Other red flags include calls from creditors about debt linked to your child or notices from the Internal Revenue Service about unpaid taxes on income or the use of your child’s Social Security number on another tax return, says Adam Levin, chairman of IDT911, an identity theft and data risk management services provider.
Sound the alarm bells if you attempt to open a financial account for your child but find that one already exists, or receive a rejection for poor credit history.
Keep a close eye on existing savings, CDs or sub-account credit cards in a child’s name. “Sometimes, knowledgeable identity thieves will make 1 or 2 small ‘test charges’ on an account over a period of weeks or months to see if any adult is paying attention,” says Winston.
Even though your kids may want to shout their birthday from the rooftop, warn them that private information shouldn’t be shared on websites that aren’t trustworthy. Caution them against downloading games or apps from third-party sites. Maintain strict privacy settings on Facebook and other social networks.
The less information out there the better, and the smaller the circle of people who can access their profile the better. Even small details, like a birthday or mother’s maiden name, can provide clues for security-question answers.
Beware of online scams. Sometimes scammers will befriend children online and chat them up for private information that can be used to steal their identity.
“Identity thieves troll social networking websites, so make sure private information like date of birth (or) address and names of family members are not included in profiles,” says Levin, who advises parents to hold off on giving children their Social Security number until they’re old enough to know how to properly use and protect it.
If you suspect your child’s identity has been compromised, contact the 3 major credit-reporting agencies — Equifax, Experian and TransUnion — and request to see credit reports on your child’s Social Security number.
The credit reporting agencies are required to respond, even if it’s just to report that there are no credit transactions related to your child, says Winston.
In light of rising child identity theft, some experts recommend annual checks on your child’s credit report. If your child’s credit history has been tarnished with fraud, you will have time to correct it “before the child applies for a job, a loan for tuition or a car, or needs to rent an apartment,” says Levin.
Other experts, like Weisman, suggest a safety check when your child is 16, especially if there are no signs of fraudulent activity. By checking your child’s credit at age 16, your child has enough time to sort out any possible issues well before applying for financial aid or a job.
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Monitor your child’s medical history
Identity thieves don’t only steal personal information for credit purposes. A growing fraud frontier involves medical identity theft, which gives impostors the ability to obtain anything from prescription drugs to pricey medical services. These transactions may not show up on a credit report.
According to the Federal Trade Commission, there are ways parents can detect fraud, including if you receive bills, collection notices or calls from debt collectors regarding medical services in your child’s name that you don’t recognize.
Parents should be alarmed if they see:
Unfamiliar listings of office visits or treatments on their explanation of benefits.
If they are told by their health plan that they’ve reached their benefit limit.
If they are denied insurance because their medical records show a condition they don’t have.
Because insurance companies make important financial decisions about the products and premiums they extend to their customers, the accuracy of your child’s medical history is critical, says Winston.
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Take action if your child’s ID is stolen
If you see evidence that your child’s identity has been stolen, report it first to the local police. Bring evidence, such as credit card bills, collection notices, letters from the IRS and be sure to request the actual police report for your records.
“To bolster your evidence trail for the police, file a complaint at FTC.gov, print your ‘Identity Theft Affidavit’ and use it to file your police report,” says Winston, the privacy law attorney. The paper trail will be instrumental in helping you clear your child’s credit of unauthorized charges.
Second, inform the individual creditors and credit-reporting agencies of the fraudulent activity. Ask the credit bureaus to remove the illegal charges from your child’s record.
It’s important to press the 3 credit-reporting agencies to launch an investigation, says Weisman, of Scamicide. The agencies won’t remove the data “unless they’ve independently confirmed that indeed it was identity theft.”
He recommends putting a freeze on your child’s credit report, which prevents access to your child’s credit. It costs a few dollars to freeze or remove it, but Weisman says it is the most effective way to keep an impostor out.
FREE CREDIT REPORT: Keep tabs on your own credit report for free, at myBankrate.