Did you know that 1 in 50 children are affected by child identity fraud? In fact, the Federal Trade Commission (FTC) reported that incidents of identity theft where the victim was under age 19 increased 50% last year. More than half of those crimes involved children under 9 years old.
A child’s untapped identity and credit history is an attractive target for identity thieves, who open credit cards, commit tax fraud, apply for government benefits, or find a place to work or live. This kind of identity compromise can go undetected for years — at least until your child applies for a credit card account or loan.
You may be thinking, how can someone open a new credit card in my child’s name when they have no established credit? Synthetic identity theft can occur when a criminal combines an innocent child’s real Social Security number with a fake name, address, and other personally identifiable information (PII) to create a new identity. And, while many of these fraudsters hide behind the veil of the Dark Web, the perpetrator is often those you’d least expect.
“Familiar fraud” is on the rise, as Javelin Strategy & Research’s latest Child Identity Fraud Report estimates 70% of child identity crime victims know the perpetrator. This may include a family friend, extended or a close relative, or even a parent.
GOING ONCE, GOING TWICE: YOUR CHILD’S FINANCIAL FUTURE
Few places require your child’s Social Security number, but their school, health insurance provider, and doctor’s office all have forms where it is requested regularly. With healthcare data breaches on the rise, along with parent social oversharing, smart toys, and mobile applications gathering their information, kids’ identities are increasingly at risk. “Child fullz,” the name fraudsters use to refer to a child’s complete stolen information package, can be easily found for sale on the Dark Web. These “fullz” include names, dates of birth, addresses, and Social Security numbers. Each packaged identity starts at $8 each or can be purchased in bulk for even less.
IS YOUR CHILD A VICTIM OF IDENTITY THEFT?
If you have a hunch your child’s identity is in the wrong hands, it may already be too late. Beware of the following red flags:
- You receive a notice from the IRS regarding a tax return filed under your child’s name
- You are denied government benefits because your child’s Social Security number is attached to someone else’s benefit claim
- Your child receives credit card and loan offers in the mail
- Collection calls and notices start targeting your child
LASTING DAMAGE OF SYNTHETIC ID THEFT ON CHILDREN
Aside from the emotional devastation triggered by realizing your child is a victim of identity theft, the serious financial damage can take years to repair. By the time they are age 18, a fraudster could have racked up thousands of dollars in debt in their name. Javelin Strategy & Research recently reported that child identity theft costs U.S. families nearly $1 billion each year, not to mention the lost time and effort spent trying to clear their identities.
TIPS TO PROTECT YOUR CHILDREN FROM IDENTITY THEFT
- Lock down your family’s personal information. Take control and don’t feel pressured to provide sensitive information when completing certain forms. Ask how the information provided about your child is used and, more importantly, secured. Store important documents in a safe place and shred any that are outdated and unnecessary.
- Check for credit. The FTC recommends checking to see if your child has a credit report as they reach age 1816, giving you time to resolve any found issues before they apply for credit cards and loans, a job, or an apartment at age 18.
- Freeze their credit. The law allows parents to freeze their children’s credit for free, preventing a fraudster from opening new lines of credit in their name. Each credit bureau has a process for legal guardians to follow, so check for details.
- Safeguard your family with identity theft protection. Be a step ahead of cybercriminals and have an extra set of eyes monitoring your family’s personal information.