It’s Never Too Soon to Protect Your Child’s Credit

child's portrait

Would you know if someone opened a credit card in your six-year-old’s name? Photo: allthecolor/reynermedia

Legendary bank robber Willie Sutton is often quoted as saying he robbed banks because that’s where they keep the money.

Modern criminals in search of easy cash are more likely to use other means to separate you from your money. In 2011, for example, bank robbers took about $38 million from U.S. banks. That same year, identity thieves took more than $8 billion from consumers, and the numbers go up from there: $13.2 billion in 2012, and $21 billion by 2013.

Electronic theft and fraud are on the rise for the same reason Sutton robbed banks: That’s where the money is. While most identity theft doesn’t cost consumers directly in terms of lost funds, it does cost them indirectly in increased costs for credit and goods and services. In some cases, it can also result in lost opportunities, such as being unable to buy a home due to fraudulently damaged credit reports.

In most cases, people discover the problem within at most a year or two of the activity, but for the most vulnerable, the crime may not be discovered for 10 or 15 years or more. Children are increasingly falling victim to identity theft, and often don’t find out about it until they’re 18 or older and turned down for credit because of all the negative activity on their reports.

An Ounce of Prevention

The sports and military adage “The best offense is a good defense” is ideally suited to protecting your child’s identity. Here are some ways to stay on the offensive:

  • Family Educational Rights and Privacy Act (FERPA): This federal law provides parents with the right to opt out of sharing contacts and other information with third parties, including other families.
  • Determine who has access to your child’s personal information (doctors, dentists, schools, athletic teams and clubs, etc.) and verify that all contact information is securely stored.
  • Pay attention to official notices, particularly for older children who may want to handle them on their own.
  • Ask about school policies regarding privacy and records, and address concerns with administrators, school board officials, and law enforcement if necessary.
  • Check your child’s credit report around their 16th birthday to make sure it’s empty, and immediately address any errors.

Staying Ahead of the Curve

Sometimes there are warning signs that your child’s Social Security number has been used as part of an identity theft scam, such as receiving IRS notices, calls and letters from collection agencies, or being turned down for government benefits. Other times, such warning signs won’t occur because identity thieves will use your child’s name and Social Security number, but not your address.

If you suspect your child’s Social Security number or identity has been compromised, request a credit report in their name. If there is any activity, including inquiries, ask each of the credit reporting bureaus to conduct a manual search of your child’s file. They will most likely require supporting documents, including a birth certificate listing the parents, a copy of the child’s Social Security card, a copy of your driver’s license or other government-issued ID, and proof of address.

Repairing Damage

Insist that any and all entries on your child’s credit history be completely and permanently removed, including inquiries.

  • Contact each credit reporting agency and alert them to what was found in other reports. Insist that no new entries be made without verifying their legitimacy.
  • Personally contact each business that issued credit or made an inquiry using your child’s information and ask that they remove your child’s name and information from their records and flag the account as fraudulent.
  • Finally, have a fraud alert associated with your child’s name and Social Security number.

Educate Your Kids

Protecting your children from themselves is as important as protecting them from strangers. Starting at a young age, explain to your children that they are unique individuals and that their personally identifiable information, like their Social Security number, keeps track of what they do throughout their lives — and it needs to be protected.

Imparting good personal-identity security habits can be as simple as having them ask you for permission before they provide any personal information to anyone, including other children, especially online. Educate them about Internet security and phishing scams, and what to be on the lookout for.

A good way to make personal-identity security education both age-appropriate and a regular process is to make a new lesson about protecting personally identifiable information a part of each birthday. Think of it as present that is both priceless and lasts a lifetime.

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