It's hard for young Americans to leave the security of their childhood home and find their way in the real world. It's even harder when identity thieves have stolen their identity and ruined their credit before they even have a chance to establish their own record.
The Federal Trade Commission (FTC) reported just under 14,000 cases in 2017 and over 15,000 cases in 2016 involving identity theft of Americans age nineteen and younger. The credit bureau Experian reports that around 17% of their annual fraud cases target children, and they estimate that 25% of children will experience a form of identity theft or fraud before they turn eighteen.
Identity thieves consider a child's ID a gold mine. Parents don't think to check for fraudulent accounts established in their minor child's name. They may not find out about the identity theft until bills or collection notices arrive or tax forms are rejected – perhaps years after the damage is done.
How do thieves get children's information? A Social Security number is generally all they need – the rest can be pieced together with a basic Internet research. Think of all the places that your child's Social Security number is collected and stored – schools, medical facilities, tax forms, day care centers – even sports leagues and summer camps often require Social Security numbers for identification.
Every reveal of your child's Social Security number is an opportunity for hackers to steal that information. Hold back your child's Social Security number and other personal information unless it's essential. Safely store any documents containing your child's personal info and shred the non-essential ones.
Consider your definition of "safe" very carefully – family members and friends can also perpetrate child identity theft.
Social media also provides plenty of information for thieves to use. They may not find a Social Security number, but they may find enough information (place and date of birth, etc.) to successfully open accounts. Be careful about what you post online.
If your child has a credit report, you can place a credit freeze in your child's name with the three major credit bureaus (Experian, Equifax, and TransUnion). If your child has no credit file, you can create one and place a freeze on it. The recently-passed Economic Growth, Regulatory Relief, and Consumer Protection Act will make these actions free starting in September 2018.
A credit freeze prevents anyone from accessing your child's credit file – even you or your child – and prevents thieves from opening an account in their name. You can unfreeze the file when your child reaches age seventeen or is ready to establish credit – but be sure you properly store the PIN number required to unfreeze credit when the time comes.
If you haven't checked to see if there is a credit report on your child, do so now. You can limit the damage caused by any identity theft and start the long process to clear your child's name. The Identity Theft Resource Center is an excellent resource for helping you assess the problem and walk you through the reporting and repair process.
Hopefully, there's no damage and you can take pre-emptive action to keep identity thieves from opening accounts in your children's names. Do your children a favor and protect their identity and their credit to the best of your ability. Give them every opportunity to start life on their own with a clean slate – and then you can discuss whether their old room will be a craft room or a mancave.
If you would like to prevent identity theft, check out our credit monitoring service.