Child Identity Theft

March 9, 2008

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Have you ever heard a story about a dinner party about someone’s kid receiving a pre-approved credit card offer? “Oh those wacky card companies!”. It may not be a laughing matter - child identity theft is a growing problem and that child may be at risk.

Family Comes First

The Identity Theft Resource Center (ITRC), over half of child identity theft cases in the United States involve a parent or other relative. Its getting depressingly common that parents who run into credit problems use their kids’ Social Security Numbers to apply for credit under the child’s name.

They tell themselves that they will pay it off and no harm will come, but it doesn’t usually work out that way. There are stories out there such as 7 year old who owes back taxes on $60,000 because someone else has been using his identity to collect wages and unemployment benefits.

Not Found Out Until Later

Child identity theft is so appealing to potential thieves is because it is usually not discovered until much later. According to the ITRC, 54% of the time the theft occurs before the child is 6 years old, but “most of the time, what happens is a child finds out in the worst way,” says Jay Foley. “They’re applying for a student loan, they’re getting ready to go to college and they can’t because their information has been already tainted with bad credit.”

How to Prevent Child Identity Theft

It’s pretty difficult to totally prevent child identity theft, but here are some things you can do:

• Bevery wary when giving out your child’s Social Security number or photocopy of a birth certificate. Ask whether it is
  completely necessary and ask where it will be kept and who can get to it
• Shred any papers that have account or SSN information (obvious but needed to be said)
• Do not carry around your child’s Social Security card in your wallet or purse. If you feel like you need to, carry a copy with the last 4 digits cut out. Only take the real one when you know for sure you will need it
• If you start receiving pre-approved credit card offers or bills in your child’s name, get a copy of the his or her credit report right away to make sure that it is clean

What to Do

If you think that your child has been a victim of child identity theft:

• Immediately request the credit reports from Equifax, Experian, and Transunion
• Notify the agencies if there is anything that does not look right
• Call the police if warranted
• Point out that the child is a minor and that by law can’t enter into a contract
• Ask to have all accounts removed immediately from your child’s credit report, both from the lender and the credit bureau
• If the situation is really bad, you can get a new Social Security Number for your child. Since they are so young, they should have no credit history and therefore there is little downside

If you have any other tips or stories about child identity theft, leave them in the comments.

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