Is Your Child at Risk? How to Protect Your Child's Identity
It's finally time for your child to branch out on his or her own — to apply for college, to purchase their first car, to get their first apartment. You sit down and complete the student loan applications, car loan applications, mortgage applications … and wait. Soon after that, the response finally comes, and you can breathe again. Or can you?
According to a report from Javelin Strategy and Research, more than one million children were victims of identity fraud in 2017. You'd think that your child would be debt free before coming of age; after all, a child isn't legally capable of signing debt agreements. On the contrary, it turns out that your child has been racking up debt for several years — or at least, their social security number has. That student loan application? Denied. Car loan? Denied. Mortgage? Denied.
How could this happen? There are several ways a child's identity could be stolen.
- The Security Breach
Someone lifts information from forms compromised by your child's school, doctor, after school program or government organization.
- The Synthetic Identity
Someone applies for a credit card using a randomized social security number, or an SSN from a list of unlinked SSNs, creating a fictional person to match that number.
- Familiar Fraud
A relative (parent, sibling, cousin, grandparent) uses your child's personal information to apply for credit in their name.
Unlike adult victims, child victims often discover the theft long after it occurs. That's because adults often scan their bills, accounts, and communications for signs of fraud. A child often won't have access to a bank account, credit card bill, insurance claim or online account that you can monitor for unfamiliar behavior. And the costs are substantial; according to Javelin, child identity theft led to losses totaling $2.6 billion in 2017.
So how do you know if your child's identity has been stolen? The FTC provides a list of warning signs.
- Your child was turned down for government benefits on the basis that they are already receiving them.
- You receive a notice from the IRS that your child hasn't paid income taxes, or that their name was used on another tax return.
- You begin to receive pre-approved credit offers, collection calls, and bills in your child's name.
You're not completely powerless though; there are ways to protect your child from identity theft.
- Contact the 3 nationwide credit reporting companies to request a credit report.
Those companies are Equifax, TransUnion, and Experian. These companies screen for use of your social security number in requests for credit across the web. Make a point of checking your child's credit report when they turn 16 to head off any problems that might arise when they're ready to start applying for loans. The added benefit of this is that creating an account with the credit reporting companies will associate your child's social security number with their name, preventing an identity thief from creating a synthetic identity with their social security number.
- Place a freeze on your child's credit.
As of September 2018's Dodd-Frank Rollback, credit reporting companies cannot charge you to place a freeze on your credit. This will prevent potential identity thieves from using your child's social security number to request new credit. It also operates as a separate level of security, since you'll need to unfreeze the account before your child can apply for credit for themselves.
- Teach your child how to be safe online.
Start early in teaching your child the importance of keeping any personally identifiable information to themselves. Javelin reports that children who overshare information online are more likely to be victims of identity fraud. You might already be monitoring your child's online activity to protect them from bullying, but you should also monitor where your child goes for support. Users who seem like friends to your child could be collecting personal information for nefarious reasons.
Also teach your child not to fill out any forms online without your help. Children will be less capable of screening websites for possible phishing attempts. If you need to input information into a website for any reason - from online shopping to gaming logins - require that your child come to you first.
- Contact businesses that have your child's information.
If you receive a credit card pre-approval for your child, contact the company and ask them to remove your child's name from their list. Investigate symptoms of identity theft and alerts sent by organizations after fraud occurs.
- Protect your child's personal information.
Keep important documents, like their social security card and birth certificate, in a safe place and out of range of residents and visitors to your home. Shred any documents that you don't need anymore if they have personal information on them. Before you share their social security number with a school, doctor's office or program, ask why it's necessary and if there are any alternatives to providing this sensitive information. Investigate school forms before blindly filling them out.
- Monitor existing accounts.
You might have set up a college fund for your child before they were born. Keep an eye on that account just like you would any other account. Remember that, while you can register your child as an authorized user on your account, creating a bank account, requesting a loan, or taking out a credit card in your child's name is identity theft.
- File an Identity Theft Report with the FTC.
If your child's identity is stolen, you're not alone. The FTC maintains a website where you can report identity theft, create a recovery plan, and put your plan into action. Other places that you could consider contacting are the IRS or the Internet Crime Complaint Center (IC3). ConsumerAffairs also offers a great resource for facts on identity theft and identity theft protection.
Identity theft can have a lot of faces: financial, medical, governmental or criminal. In our increasingly data-driven society, it seems more and more possible for a bad actor to get control of your child's identity. However that happens, the effects will come back to harm your child, in the form of a bad credit record, debt, denied government benefits, false medical records or a false criminal history. Thankfully, with some vigilance, you can protect your child from identity theft so that they can enter adulthood with a clean slate.