#25 Child Identity Theft
Child identity theft occurs when someone uses a child’s identity, often involving the unauthorized use of the child’s Social Security number, to commit fraud. This might include opening credit accounts, taking out loans, or applying for government benefits or a job.
The crime can go undetected for years. Debts may pile up. Victims of child identity theft often discover it when they are older. They might apply for a student loan, for instance, but get rejected due to damaged credit.
How great is the risk? According to one study, children were 51 times more likely than adults to become victims of identity theft, according to a report from Carnegie Mellon University Cylab.
Child identity theft usually begins with a stolen Social Security number.
Parents often request a Social Security number for their children soon after the child is born. Why? For a lot of reasons. Parents need that number to claim the child as a dependent on their income tax return, to open a bank account for the child, or to get medical coverage for the child. Also, parents can buy savings bonds or apply for government services for the child.
Child identity theft can happen when the child’s Social Security number is stolen and used to commit fraud. A thief might use a child’s Social Security number to build a credit file over the course of years—in effect, creating a false identity.
What are the warning signs of child identity theft?
You might not think often about your child’s Social Security number. And usually there is no reason to believe that your child has an active credit file at a major credit bureau. After all, younger children likely do not have a reason to seek credit. But there are signals that something might be amiss:
- Receiving pre-approved credit card offers in the mail – Credit card companies send offers based on information gleaned from someone’s credit file. An offer suggests your child has a credit file at one of the credit bureaus – meaning, a history of borrowing money.
- Getting turned down for government benefits – You might apply for a government benefit for your child but discover that the benefit is being paid to another account using your child’s Social Security number.
- Getting a notice from the IRS – A letter from the IRS saying your child didn’t pay income taxes is one tipoff.
- Receiving calls or letters about unpaid bills – If a collection agency calls to say your child owes someone money—or if a bill in your child’s name arrives in the mail, this could indicate that your child has been a victim of identity theft.
Credit monitoring will not alert you to this type of fraud.
LibertyID will take the following steps for/with their members:
- Place credit freezes at all three credit reporting agencies
- Contact businesses where the child’s information was misused and have the business close the fraudulent accounts and note the presence of identity theft
- File report with FTC
- File a police report
- Review credit reports with the victim to ensure there is no other types of fraud
- Provide credit monitoring with alerts for 12 months
- Periodically contact the member throughout the 12 months following resolution of their ID theft recovery case if warranted