Here's a question for you:
What comes to your mind first when you think about protecting your children? I would bet the answer involves things like making sure they wear a bike helmet and teaching them to be cautious about talking to strangers. These things are certainly important aspects of keeping our kids safe. In today's global, digital world, however, there are new things parents should be wise to - like preventing child identity theft.
You may be thinking: "That will never happen to my child", but the truth is that it does happen - and it happens more often than you may think. Most adults are aware by now of the importance of protecting their own information from potential exposure to an identity thief. Unfortunately, this vigilance must now extend to all family members - even the youngest.
According to an industry study done by Carnegie Mellon University's CyLab, more than 10% of children have social security numbers that are being used by someone else. I'm sure you'll agree that's an alarming number.
Fortunately, I've got a solution. Here are things you can do to reduce the risk of this happening to your child. I'll give you the lowdown on what to watch for, what happens to identity theft victims, and how to protect your child's credit history.
In This Guide
What Is Child Identity Theft?
The most common type of child identity theft is known as synthetic identity theft. This happens when a criminal obtains a child's social security number and uses it with a fake name and address, essentially creating an entirely new, fictitious individual. For identity thieves, synthetic is preferable to true name identity theft (using a person's SS number and real name and other information) because it would be difficult to obtain credit with a minor's real birth date - no business is going to give a child credit.
While there are other types of this activity, like medical and criminal identity theft, the FTC (Federal Trade Commission) reports that synthetic identity theft now outstrips other kinds, making up about 80-85% of identity crimes. There are three main reasons people engage in this type of criminal activity:
- Financial fraud by strangers: this is when thieves want your child's SS number for the purpose of obtaining credit to buy goods or services, such as via credit card, debit card, or cell phone accounts.
- Financial fraud by known persons: according to the non-profit Identity Theft Resource Center at least 27% of child identity theft is carried out by someone who knows - or is a member of - the family. This often happens when parents are experiencing rough financial times and need a clean credit history. Statistics on this type of fraud are thought to be grossly underestimated due to the length of time it takes to catch someone at it and the potential unwillingness of the victim to report such activity to the authorities.
- Illegal immigration: stealing a new social security number can enable a person who is not legally permitted to work in the United States to obtain employment and possibly government services.
Regardless of the reason your child's identity gets stolen, it can have devastating effects on them once they reach adulthood. Areas of their lives which can be affected include the ability to get housing, employment, and student loans. They may even inherit a criminal record that doesn't belong to them or experience mix-ups in their medical records.
There are numerous federal laws in place designed to protect you and your family from this kind of criminal activity. The United States Office of Justice Programs provides information on these laws, which can help you understand your rights.
Related: How to Prevent Cyberbullying