SALT LAKE CITY — Child identity theft is one of the fastest-growing crimes in America. It serves as a reminder that parents should be careful when sharing their children's name, date of birth or social security number with third parties.
Child identity theft occurs when a child's personal identifiers are stolen by an imposter and used in the application for credit, goods, benefits, services, licenses or employment. The identity thief could be a family member, a friend or a complete stranger. Identify thieves purposely target children because of the lengthy time between the theft and the discovery of the crime.
According to the Federal Trade Commission, child identity theft reports have more than doubled since 2006. With 144,213 reported cases in 2010, the FTC has predicted that number to double again by 2013.
Children are easy targets because identity thieves get an 8-10 year head start on them. Most are not aware they have become victims until they apply for a driver's license, employment, credit, the military or college.
While most child identity theft cases involve strangers, often split families or broken homes account for others. This is where one of the parents is the perpetrator and the crime is exposed by the other. More often than not, the offending parent has bad credit and is unable to obtain rental housing or open a utility account.
Discovery often occurs:
1. When attempting to open a savings/checking account or college fund. In this scenario, the unoffending parent discovers that there is already an account under the child’s social security number or that the account is denied as a result of worthless checks on file at Telecheck or ChexSystems;
2. When pre-approved credit card offers come in the mail bearing the name of the child;
3. When credit cards, checks, invoices or bank statements not opened by an unoffending parent as a joint holder are received bearing the name of the child;
4. When debt collectors call and send letters about accounts not opened by the child;
5. When a child is denied a driver's license because another individual has one with their social security number. The imposter may even have accumulated traffic tickets in their name;
6. While going through papers during a divorce proceeding or while straightening up the house (in cases of parental identity theft);
7. When a law enforcement officer knocks at your door with a warrant for your child’s arrest.
The FTC recommends vigilance when sharing personal information about your child and urges parents to report discrepancies to the agency.
Utah program aims to help parents, children
Child identity theft is part of a growing number of scams and is the fastest-growing segment of identity theft. Taking the initiative to be proactive in the fight against child identity theft, Utah Attorney General Mark Shurtleff recently implemented a new Child Identity Protection program aimed at curtailing these crimes against children.
Partnering with the TransUnion consumer reporting agency, Utahns can now protect their children against identity thieves by registering them with the state agency. Upon registration, the child’s name and social security number are forwarded to the credit bureau where it is placed into a “high-risk” database, warning those who inquire not to issue credit or other benefits to applicants using that number.
“Parents can proactively reduce the incidence of identity theft for their children through our CIP program,” Richard Hamp, the assistant attorney general who helped create the program, told KSL. “Although the program does not completely eliminate the risk for past identity theft victims, it does reduce it.”
A common misconception among creditors and credit reporting agencies is that they have a method of verification when it comes to the age and identity of an individual. Since most creditors rely strictly upon the written application when rendering a credit decision and the “age” of an individual becomes “official” with a credit reporting agency upon the first application for credit, said reliance can be fatal and lead to child identity theft.
“We commend the Utah Attorney General’s office for leading the fight against child identity theft,” TransUnion’s president of Consumer Services, Mark Marinko, told KSL. “TransUnion’s hope is that our joint efforts will build momentum for participation within the federal government, particularly the Social Security Administration, whose assistance in similar programs would significantly contribute to reducing child identity theft once and for all.”
Tips for protecting your child
There are instances that may appear to be identity theft but are not. Receiving a pre-approved credit card offer might upset you as a parent but may only be the pitch of a potential creditor because you opened an account or college fund in your child’s name. A quick check of credit reports will help sort out the truth.
All three credit reporting agencies have automated systems for requesting credit reports. You should contact them semi-annually to request a credit report on your children. If you are advised that no credit report exists, your child is probably safe for the time being.
When someone requests your child's social security number, ask questions before providing it, including why it is needed, who will have access to it, and how it will be safeguarded. If you are not comfortable, refuse to provide the number.
If your child becomes a victim of identity theft, immediately file a police report with your local law enforcement agency. Federal law mandates that credit reporting agencies investigate and assist identity theft victims. Nevertheless, it all starts with a properly filed police report. Without one, creditors, collection agencies and credit reporting agencies are not required to act upon your complaint.
To learn more about child identity theft and how to protect your child from becoming a victim, visit the Federal Trade Commission’s website at ftc.gov.
“Until the Social Security Administration allows unfettered access to their consent based social security number verification service, children will continue to be at risk,” concluded Hamp.
Bill Lewis is the principal of William E. Lewis Jr. & Associates and host of The Credit Report with Bill Lewis - a daily forum for business and financial news, politics, economic trends, and cutting edge issues on AM 740 WSBR in south Florida.