More than one million children were the victims of identity theft in 2017, according to a new study from Javelin Strategy & Research. Two-thirds were under age 8. These crimes led to losses of $2.6 billion – some of which came from the pockets of the victims’ families.
Why would identity thieves go after kids? It’s not like they have credit histories, right?
That’s exactly the point. The blank-slate status of a child lets a thief apply for credit cards, take out loans (including mortgages), open utility accounts, and commit fraud on tax, employment, health, and government forms.
Unlike their elders, children don’t generally monitor their accounts or have protections like bank alerts or identity theft protection services in place. That lets the crooks open accounts gradually, giving the appearance of legitimate credit activities.
This means fraudsters can steal a lot more. On average, a child’s identity theft cost $2,303 – more than twice the amount stolen from adult victims. To add insult to injury, the children’s families were held liable for at least some of the fraud, an average of $541.
Data breaches are harder on kids than adults. Among people who were notified that their information had been compromised, 39 percent of minors ultimately became victims of fraud. By contrast, identity thefts went after only 19 percent of the adults whose material was stolen.
Children are vulnerable. Here’s how to protect yours.
Secure physical documents.
Three out of five child ID theft victims personally know the crooks. That could mean relatives or people with access to the child’s information, such as a medical care provider.
Don’t make it easier for thieves! Lock up a child’s birth certificate and Social Security card, either in a file cabinet or a safe deposit box.
Be careful what you give out.
When filling out medical or school forms, skip the part that asks for the child’s Social Security number. You don’t have to give it. If an overzealous clerk at the doctor’s office asks, politely say that you’re concerned about ID theft and therefore decline to use the number.
And if the clerk says, “But this computer form requires numbers in all fields,” do what Consumer Reports suggests: Ask the clerk to fill in the field with all zeroes.
It’s easy to share info accidentally, such as when you let your kid sign up for a rewards club offered by his favorite store. Instead, use your own information rather than letting him have the account in his own name.
Be careful what the school gives out.
Sometimes schools release information about students – including personally identifiable material such as address, date of birth, phone number, e-mail address, and even photos – to third parties.
Ask your child’s school about how to opt out of having this material made public.
Be careful what your child gives out.
It’s never too early to teach kids to be cautious about their digital identities. When signing up for online forums or gaming groups, tell them not to provide identifiers like a middle name (if possible, avoid using even a first name in favor of a nickname like “Destroyer of Worlds”), or date of birth (it’s okay to turn “8/19/2006” into “12/25/2006”), home address or, heaven forbid, a Social Security number.
Children are accustomed to having a ton of anonymous “friends.” Don’t let them be catfished into sharing vital information. Speaking of which, you should…
Monitor your child’s online activity.
Remember those anonymous friends and fellow gamers/commenters? You have no idea who they are. Your daughter is likely to believe that Destroyer of Worlds is also an 11-year-old girl – which she actually could be. However, DoW could also be an identity thief.
If you do allow your child to participate in social media and other online activities, make it clear that the password will always be available to parents, who plan to check regularly on Junior’s activity. Ideally, such activity would be done in a common area of your home.
Yep, your kid may just hate these rules. But that’s what parents do sometimes: Aggravate their children in order to keep them safe. You need to know where your child’s conversations take place and what kind of info he’s sharing online.
Monitor your child’s finances.
Watch for warning signs.
Imagine getting a pre-approved credit card offer in your child’s name. Just a funny computer glitch, right?
Maybe. Maybe not. Someone who’s using your kid’s identity may be so good at opening cards that other companies want in on the action.
A few other warning signs:
- Bills or collection notices in your child’s name show up.
- An application for government benefits gets refused because someone else is already using that Social Security number.
- The IRS writes to say your child owes taxes. (Note: Any phone call from an “IRS employee” is fraudulent, since the IRS communicates by mail only.)
If you see one or more of these signs, you should…
Find out if your kid has a credit history.
Contact all three of the major credit reporting bureaus to ask for a “manual search” of files relating both to the child’s Social Security number and to the child’s name and Social Security number.
Here’s how to get in touch:
- Equifax: 800-525-6285
- Experian: 888-397-3742
- TransUnion: firstname.lastname@example.org
You’ll likely be asked to provide information, such as copies of the child’s Social Security card and birth certificate.
Incidentally, the FTC suggests checking for a credit history close to the child’s 16th birthday. That gives you time to correct any issues, before the child needs to apply for a student loan or an apartment rental. (Learn more at the FTC’s “Child Identity Theft” page.)
Consider a credit freeze.
A credit freeze keeps potential lenders from accessing your child’s account. Should someone steal Junior’s info and try to open a new credit card, the freeze acts as a shield. No federal standard exists regarding credit freezes for minors, but many states allow it.
If you learn that your child’s credit has been compromised, take action. The FTC offers information on tactics like placing a fraud alert and creating an identity theft report.
Does this sound scary? That’s because it is. Don’t let thieves cause personal and financial stress for your family. Be as vigilant about your child’s credit as you are your own.
Veteran personal finance writer Donna Freedman is the author of “Your Playbook for Tough Times: Living Large on Small Change, for the Short Term or the Long Haul” and “Your Playbook for Tough Times, Vol. 2: Needs AND Wants Edition.”