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
Effects of Child Identity Theft
Beyond the obvious problem - which is that a thief can use your child's clean credit report in order to gain financial benefits - there are other issues that can arise from the various types of child identity theft.
Criminal Identity Theft
This is one of the most deleterious types of identity theft because it can have devastating consequences for your child's police record (or lack thereof). Criminal identity theft happens when someone who has stolen your child's SSN and/or other personal information provides that information to a police officer or law enforcement agency. It may be years before the problem comes to light; meanwhile, there could be bench warrants, court summons, or other legal actions issued in your child's name.
If you suspect that your child's identity is being used by someone for the purpose of avoiding legal consequences you should immediately contact your local law enforcement agency to begin proceedings to prove that your son or daughter is not the individual in question.
If you don't know that your child's information is being used by someone else for this purpose, he or she could eventually be faced with the following challenges:
- Denial of a driver license number or other government-issued documents or benefits
- Trouble getting a job when crimes or even missed court dates from traffic tickets show up in the background check
- Arrest upon a traffic stop due to bench warrants
If you suspect that your child's identity is being used by someone for the purpose of avoiding legal consequences you should immediately contact your local law enforcement agency to begin proceedings to prove that your son or daughter is not the individual in question. You may also have to petition the court to have the records changed. In extreme scenarios, your child may need to carry documentation showing that their identity was stolen and used by someone else in case of a traffic stop.
Medical Identity Theft
If someone obtains your child's insurance information they may be able to use it to get medical treatment or other services without ever paying a dime on the bill. Signs your child may be a victim of medical identity theft include:
- Receiving bills for services never rendered
- Denial of service
- Notification from your insurance company that your child has reached his or her maximum benefit amount
- Collection notices or calls for bills you did not incur
It's important to monitor any documents you receive from your health insurance company or healthcare providers to make sure they correlate with services actually rendered. If you suspect fraudulent activity, contact your health insurance company immediately, review your medical records, and contact all three credit reporting bureaus to request that any fraudulent claims be removed.
How Child Identity Theft Happens
As parents, we are often so busy and distracted by the minutia of everyday life that we don't even realize how frequently our children's information is exposed to potential fraud. I for one have certainly been guilty of simply scrawling my kids' SS numbers on forms and documents without a second thought about where that information might end up. We tend to do this on autopilot. It's in our kids' best interest to be more discerning about whom we allow access to sensitive personal details.
Where Is Your Child's Information?
You may not even realize how widespread your children's information has become. Potential data mines for identity thieves include:
- School records (particularly with many schools now requiring birth certificates)
- Medical records - doctors' offices, hospitals, health insurance companies, etc.
- Government institutions
- Your computer
While we should be able to trust certain organizations with our family's vital information, all it takes is one unscrupulous person with access to - or the ability to hack into - one of these sources. In fact, in 2015 Anthem Health, a major nationwide insurance provider, fell victim to a hacking scheme in which 80 million customers' information was stolen. The security breach was so massive that even the Anthem CEO was among the list of victims. The company ended up setting up a website for involved individuals and offering two years of free identity monitoring and repair to the victims.
The lesson we should all, as parents, take from such incidents is that child identity theft isn't something that happens to other people. It's a modern-day issue of which we all need to be aware and take precautions to prevent.
How to Protect Your Child's Identity
An ounce of prevention is worth a pound of cure when it comes to protecting your child's identity. It's best to take measures now, even if your son or daughter is still a baby, to ensure that their credit is untouched and available to them when they need it.
There are things you should do right from the time your baby receives his or her social security number in order to minimize the risk of identity theft:
- Keep your child's social security number, birth certificate, and other personally identifiable information in a safe location at home - ideally under lock and key. Do not carry any social security cards on your person.
- Use security software on your computers in order to safe lock sensitive information from hackers. Additionally, your WiFi network should be password protected.
- Shred documents containing personal information before disposing of them.
- Stay alert for any family members or friends who may be a risk due to financial problems or other issues that cause you concern.
- Instruct your children on keeping their full name, age, school, and other private information private online (through email, social media, text messages, and the like).
- Consider using one of the credit monitoring services - yes, even for your kids. LifeLock, for example, offers identity theft protection called LifeLock Junior, which is specifically designed for people under the age of 18.
- Adopt one of the top parental control apps and software, which will help monitor your child's activity remotely.
- Utilize a VPN service. To learn more about VPNs, you can take a moment to read our guide, "What Is a VPN? And Why Might You Need One?"
You can also purchase identity theft insurance, which typically sold as part of your other coverages (such as your renters' policy) rather than as a stand-alone service. Identity theft insurance reimburses you for the costs involved in the process of recovering your credit, and typically runs between $25 and $50 per year (according to the Insurance Information Institute).
There are times you will have to provide your child's social security number, however, you still want to be aware of what's happening to that personally identifiable information.
- Always ask if there's an alternative to providing your child's whole social security number. You may be able to give only the last four numbers instead. I personally always simply skip over the SS number part when filling out forms for my children at the doctor, and it's never been brought up as posing an issue.
- Ask how the information is going to be used and how it will be stored.
- Watch for opt-out information on forms that come from places like school or other organizations, such as extra-curricular activities.
- Know your rights under the Family Educational Rights and Privacy Act, which governs student privacy rights.
- Pull a child credit report when your son or daughter reaches around age 16 so that there is time to take action on any potentially fraudulent activity before he or she will need to apply for a bank account, and college, car, or other loans.
- If you must mail a form with your child's personal information on it, drop it off directly at the post office rather than leaving it in your mailbox with the flag up. Thieves watch for those flags, knowing there may be sensitive info inside.
- Keep your voice quiet when you must recite an SS number out loud in a public place, such as inside the Social Security Administration or if you're making a phone call while out in public.
Be aware: in this age of social media, it's crucial to talk to your older kids about what they share online. Even a small slip-up could result in a big headache.
Related: If you're interested in credit monitoring on an ongoing basis and want to save money on reports, check out the top free credit report sites.
What to Do if Your Child's Identity Is Stolen
If you suspect that your child has already become an identity theft victim, there are steps which can minimize the damage and get the ball rolling on alerting relevant organizations. First, however, you should know what to look for in terms of red flags that someone is using your child's SS number.
Warning Signs of Child Identity Theft
One of the main difficulties of catching a child identity thief is that the criminal can typically continue using the stolen social security number for years before anyone notices any suspicious activity. Credit bureaus and issues of financing won't alert you because they think the person is real. Children and their parents don't usually check a minor's credit report until it's time to start applying for credit, around age 18. So it's up to you to watch for indications of a problem.
- Your child receives pre-approved credit card offers or other credit-related offers in the mail. Even though something as seemingly innocuous as a pre-approved credit card offer may look like junk mail, it can be a sign of trouble.
- You receive notification upon filing your taxes that your child's SS number was already used on another tax return.
- Your son or daughter is denied a driver license number, bank account, debit card, or government benefits due to their SS number already being used by someone else.
- Your child receives debt-collection calls.
What to Do First
The Federal Trade Commission recommends first requesting a manual inspection of your child's credit reports from all three credit reporting bureaus. This type of search allows the agencies to look in detail at both the main file (information related to the SS number in question paired with the correct name and birth date), as well as sub-files that may have been created via a synthetic identity. These sub-files will only involve the SS number but may be connected with false information like a fake name.
If the credit files reveal suspicious activity, you should follow these steps:
- Record dates, times, and names of everyone you speak to and the information you received or action that is supposed to occur.
- Ask the credit reporting agencies to remove all fraudulent information associated with your child's name and SSN - this includes open accounts, collections, and inquiries.
- Request that the reporting bureaus put a fraud alert on the file. Contacting one of the agencies is sufficient (Experian, TransUnion, or Equifax) - they will contact the other two.
- Contact all companies involved - this includes any business from whom the thief sought or gained credit, goods, or services. Let them know that the accounts are fraudulent.
- File an identity theft report with the FTC.
- Look into filing a credit freeze (which I will cover next).
- File a police report.
Federal law entitles you to three free credit reports per year - one from each credit bureau, according to the FTC.
Can You Put a Credit Freeze on Your Child's File?
A credit freeze is a tool used to block companies from opening accounts in your credit file, including businesses already associated with that file. As of late 2016, there are 27 states which allow parents to freeze a minor's credit, according to the NCSL (National Conference of State Legislatures). Even if you don't live in one of these states, however, you may still be able to request a freeze on your child's credit - it may just be harder to obtain one.
- Equifax: This reporting agency will allow parents to freeze a minor's file regardless of the laws in the family's state of residence.
- Experian: You may be able to get a credit freeze from Experian if the child's file has already been compromised.
- TransUnion: This company will only allow you to get a credit freeze for a minor if you live in a state which expressly allows it.
You may be responsible for paying a fee to the credit reporting bureau in order to acquire a freeze on your child's credit.
it's understandable to feel a little overwhelmed: preventing child identity theft seems like a lot of work on an ongoing basis. You have enough on your plate without watching your junk mail and requesting complete credit reports. Remember, though: the benefits of staying alerted to any problems outweigh any effort required. The effects of identity theft can last a lifetime, and that's a start you don't want your kids to have in life.
The important thing to remember when any organization requests personal information about your children is that by law, social security numbers are not permitted to be used as personal identifiers. The purpose of this number was originally as a way of tracking one's employment for use in relation to social security benefits.
Always question anyone who wants this information to be sure it's absolutely required, and don't hesitate to begin the reporting process if you notice any of the red flags I've listed in this guide. It could save you and your family years of grief, and ensure that your children get the best possible start on their journey into adulthood.
For mo0re tips and strategies, head over to our ultimate guide to Internet Safety & Online Privacy.