More than a million children were victims of child identity theft in 2017, according to a report from research advisory firm Javelin Strategy & Research. This resulted in total losses of $2.6 billion and more than $540 million in out-of-pocket costs to families.
“Child identity fraud is a serious problem and is frequently overlooked as the public focuses on high-profile breaches involving the personally identifiable information of adults,” said Al Pascual, senior vice president of research and head of fraud and security at Javelin, in a press release.
What is child identity theft?
Child identity theft happens when someone uses a child’s Social Security number to commit fraud, whether that’s opening a credit card, applying for a mortgage or getting a car loan.
“In order to do that effectively, they have to change the birth date of the child,” said Robert Siciliano, cybersecurity expert with fund company ETFMG.com. Once the application is approved, criminals typically follow a well-worn playbook.
Identity thieves may pay the bills on those lines of credit for a while in order to establish good credit and get credit limits bumped up. Then they stop paying, leaving a swath of late fees, interest charges and bill collectors in their wake.
How do I know if my child’s Social Security number is being used?
In more than half of child identity theft cases (60%), the child knows the perpetrator, unlike adult fraud victims, who usually do not. So in many cases, perpetrators have access to the child’s information without physically stealing a Social Security card.
If you’re keeping an eye out for fraud of this kind, though, here are potential warning signs:
- Your child is getting calls from bill collectors.
- Your child gets credit card offers in the mail. “If your kid starts to get solicited by for-profit companies in any way, that’s a red flag,” Siciliano said. “It means credit has been established.”
- You get an explanation of benefits in the mail for a medical procedure you know nothing about. Don’t assume this is a health insurance mistake.
- You get an odd result from your FAFSA request. Some parents don’t realize anything is amiss until years later, when their child applies for financial aid through the government’s FAFSA system.
- Your child has a credit report. If you discover that your child does have a credit report, that’s a sign something’s going on. Your kid shouldn’t have a credit report at all. If there’s a report available at any of the three bureaus—Equifax, Experian and TransUnion—take a look to see if there’s suspicious activity, and dispute anything that isn’t theirs.
Your child also might not discover this until they apply for credit for the first time—to rent an apartment or to get their first credit card. “We worked with one gentleman who was 24 years old, and he tried to get an apartment and he was denied for bad credit,” said Carrie Kerskie, president and CEO of identity theft recovery company Griffon Force. “He said, ‘I’ve never had credit.’ We discovered he’d been a victim since he was 2 years old. They had mortgages, foreclosures, car loans, repossessions, you name it. It was horrendous.”
How to protect your child from identity theft
The No. 1 thing you can do to try and protect your children (and yourself) from identity theft is freeze their credit as soon as possible. It’s now free to do this, and it’s also free to remove the freeze or temporarily lift it. It’s never too soon to freeze credit; as soon as a child is issued a Social Security number, they’re potential victims of identity theft.
You’ll want to do this via the three major bureaus, and it could take a while because you’ll have to establish that you’re the legal guardian of the child. You may have to send documentation, such as copies of your driver’s license, your child’s Social Security card, your child’s birth certificate showing your name on it and proof of your address, such as a utility bill.
“When you send the paperwork, I recommend sending it certified, return receipt requested,” Kerskie said. “This process could take weeks to a couple of months.”
Kerskie recommended parents contact two more credit bureaus for a freeze: Innovis and NCTUE (National Consumer Telecom Utilities Exchange). “You might just have to call them and ask if they offer the freeze,” she said.
Other strategies to consider
Talk to your children about identity theft. This is especially important when they’re going off to college. Young adults are sometimes asked to fill out “informational forms” that are really credit applications, and they can get themselves into a lot of trouble this way.
Be careful about what you share online. If your social media profiles are public and you’re sharing your children’s names, their birthdays and their pictures, identity thieves have as much data as they need to start doing some damage. “Before the child is even born, the ultrasound pictures are posted on the internet,” Kerskie said. “And everything from that point forward, the parent is posting online. All that does is give the bad guy a ton of information.”
Keep documents secure. Store birth certificates and Social Security cards in a safe, protected location, away from the prying eyes of guests and other visitors to your home.
Be wary of odd emails and calls. If your children start receiving communication via phone or email from creditors or other entities at a young age, you can use a reverse phone or email search service to try and check who’s behind these unsolicited correspondences.
If you do nothing else, freeze your children’s credit to make them less vulnerable to fraud. “Getting a credit freeze and ensuring the financial security of your child is no different than making sure they’re properly nourished and get a good night’s sleep,” said Siciliano.
Kerskie couldn’t agree more. “I’m the weird friend who, when somebody has a baby, I’m like, ‘Here’s how you do a credit freeze,'” she said. “It won’t prevent all identity theft, but it’ll prevent someone trying to apply for credit using a child’s identity.”