What is child identity theft and how can you prevent it?
Being a parent is consuming enough already. We have to do every aspect of a young child’s life for them. That includes keeping them safe. While we may know to lock the doors at home, keep choking hazards away, and always use a car seat, many parents may overlook child identity theft.
While you may never think of it, young children can be the victims of identity theft. Since kids don’t have a credit history and barely have a social security number, that thought might not ever cross the minds of busy parents. The truth is that as long as a child has a social security number, they are at risk for identity theft.
Why Identity Theft Protection Matters for Children
Our children are a blank slate in a number of ways. To identity thieves, lack of official information is a treasure trove of potential. Because there is not a lot of legal information about a young child in any record, that means the bad guys have a lot of leeway in creating their own fake identity with your child’s real identity.
If your child is the victim of ID theft at age seven, it may be a decade before you ever find out about it. Only when your child becomes 17 or 18 years old does their credit score even starts to matter. You don’t want to find out that your child is a victim of identity theft and has a ruined credit score when they go to apply for financial aid for college. Student loans are hard enough to deal with even with a clean credit slate.
What Criminals Can Do with Your Child's Credit
In that potential 10-year time, a thief can open new accounts and new credit card accounts in your child’s name. That means with your child's information they could:
buy things with a credit card
open new credit cards
collect unemployment
receive social security benefits
open fake bank accounts
get a new mobile phone
open an electrical and gas accounts
In some cases, thieves have been able to get medical procedures. And no, these are not going to be good credit scores in your child's name.
Also, personally identifiable information (PII) can be sold on the dark web. So, the thief that takes it may never use it. It may take a few months or a year to sell off. Then, it could be sold more than once and cause trouble at different times in your child’s life. Once that information is compromised, it is out there.
Why Don’t the Credit Companies Catch Identity Theft?
You might wonder if the credit reporting companies catch that a child’s information is being used to open a line of credit for an adult. Unfortunately, that is not as cut and dry as you think. The way it works is the social security number is validated separately from the other personally identifiable information in the process.
A scammer could use the identity of a 40-year-old man with the social security number of a 12-year-old girl. This may seem counterintuitive, but it’s the current process we all have to live with. For more on how this affects people everywhere, the Federal Trade Commission has some great resources.
Protecting Your Child’s Information
One of the biggest leaks of a child’s personal information is the parents. Yes, it’s us – their protectors. We may inadvertently give away very valuable information about our children in person or online.
Have you ever seen those cute birth announcement pictures on social media? A small child grips a letter board that says:
Ava Charlotte Riddle
Born 8/1/23
Sugar Land, TX
In one picture an unsuspecting parent has given away a lot of personal data like their child’s legal name, date of birth, and place of birth. That’s a lot of identifiable information for a seasoned scammer.
Then using a people search site, thieves can search for:
family member names
home address
phone numbers
work histories
home values
This gives them a robust amount of legitimate information. And what’s so bad is that at this point nothing illegal has taken place yet.
An identity thief can simply see a social media post, and then do a legal search on a site like WhitePages.com to find out the rest of the information. It’s only when they commit fraud that a crime has occurred. As parents, we must consider what we post online and how it may affect our child’s future.
Data Breaches
Data breaches are becoming more and more common in today’s world. Some breaches only divulge email addresses, passwords, or credit cards. But there was an epic data breach in South Carolina that compromised 6.4 million residents, including children.
When Nikki Haley was governor of the Palmetto State in 2012, 3.6 million social security numbers were exposed along with other personal information in a breach that originated from a phishing attack at a state government office. At the time it was the largest cyber-attack against a state agency in the nation.
In response, the state offered residents credit monitoring for two years as damage control. The issue here is that social security numbers do not change. If criminals are patient enough to have waited until 2015, they could have tons of children’s information ready to go, past the free credit monitoring period.
It may seem impossible to protect your child’s valuable data, but there are steps parents can take to shield their children’s information.
How to Know if Your Child’s Information Has Been Stolen
A tell-tale sign that your child’s information has been stolen is seeing credit card offers in the mail. No 5-year-old should be getting them. You may also be denied government benefits because someone is already using them. And if someone calls your home to say that your kindergartner has an overdue power bill, this is not a coincidence – it is a problem that needs attention. In short, getting any sort of adult offer is a big red flag that someone has compromised your child’s personal information.
How to Protect Our Kids from Identity Theft
The first thing we can do to protect our kids from identity theft is to take our child’s identifiable information seriously. Don’t share those birth announcement photos. While it may seem wonderful at the time to share a blessing with your friends and family online, the post may have unintended consequences. People on social media do not have to know (or even care about) a lot of the details of your child’s life.
Also, keeping your child’s social security number private is important. Do not give out this information unless it is necessary. While government forms may require it, consider leaving it off a preschool application. It is always okay to ask why a social security number is being requested and not provide it for non-official transactions.
And it is a good idea to teach your kids to value and protect their own personal information. This way they won’t overshare it on social media and be selective about giving it out. This will set them up for a lifetime of success and privacy.
Protect Your Child from Identity Theft with a Credit Freeze
You may think that since your young child does not have a credit score you don’t need to do anything about it. Freezing your child’s credit essentially locks it until your child is ready to use it. This will keep identity thieves from hurting your child’s credit history.
My wife and I chose to freeze our son’s credit. The process is complicated and involves snail mailing a lot of personal information to the big three major credit bureaus Experian, Equifax, and TransUnion.
Information Needed for A Credit Freeze
The information can be found online about what is needed for each company. Generally, you’ll have to:
identify who you are
that you are the guardian of the child
your government id
their birth certificate
bureau specific documents
And of course, the process is similar, but not the same for all three companies. Plus, you have to do this process for each of your children. It can get overwhelming, but it is worth it.
I’m not going to go into full details now, because it is an exhaustive process. I have created for you a free step-by-step guide on how to freeze your child’s credit. This is based on what I did to successfully freeze my son’s credit. There are links to the information you’ll need and some tips I learned along the way. I’m happy to share this with you for free.
When your child is ready for their credit to be unfrozen, you’ll need to contact all three companies again to initiate that process. When you complete each freeze, the company will mail you a packet of information on how to open the account again. Keep this information is a safe place like a safe deposit box or fireproof safe.
It does seem like a lot of work, but consider this: would you rather do some work now or do a ton later after your child’s credit is ruined? It may take years to clear the residual effects of identity thieves. Also, as an adult, you can initiate your own credit freeze which is much easier to do.
How to Find Out If Your Child Has A Credit Report
Generally speaking, a minor under the age of 18 is not going to have a credit report. If they do it is a red flag that someone is using their information for fraud. A great way to check and see is to find out about your child's credit report - if one exists.
To do this, you can contact the big three credit bureaus and request a manual search of your child’s social security number. You may have to give a fair amount of information to do this like your driver’s license, proof of address like a power bill, your child’s birth certificate, and of course their social security card.
If you choose not to freeze your child’s credit, then you may want to request one of these reports when they are 16 or 17 years old, just to get ahead of any problems before they reach legal adulthood.
If Your Child's Credit Has Been Stolen
If you discover that your child’s information has been stolen, you can report and close the fraudulent accounts and freeze your child’s credit. As you can see, one way or another freezing the credit of your children is going to be a solution either for prevention or as an emergency measure when things have gone wrong.
Yes, children can have their credit stolen from them, it happens all the time. Parents need to do their part in keeping their child’s social security number and other identifiable information private. Be protective and consider freezing your child’s credit now so they can have a strong financial future.
