Protecting Your Child's Identity
By Aleksandra Todorova
Published: August 2, 2007
SENDING YOUR CHILD off to their first summer job is a proud moment for any parent. For Kristin Smith of Mesa, Ariz., however, that milestone marked the beginning of a stressful battle to reclaim her child's identity.
It all began in mid-July, shortly after her 16-year-old son started a summer gig at a local car dealership. His new employer conducted a routine background check that returned shocking news: A man living in Phoenix was using his Social Security number. Even more shocking was the discovery by the local police department that there was more than one perpetrator. In 1994, a man from Pennsylvania with a DUI arrest on his record had been using Smith's son's Social Security number as well.
Was there any other damage, such as credit cards or other loans taken out using her son's information? Frustratingly, Smith — whose name we've changed for privacy concerns — hasn't yet been able to find out. When she tried to pull her son's credit report from the three credit bureaus, her requests were denied. The bureaus were not able to confirm her son's information, most likely because his Social Security number was already in use by someone else. (For more on this type of Social Security number-only identity theft, click here.)
Smith is now sending out letters to the bureaus, along with copies of her son's Social Security card, birth certificate and other documents to prove that his information is being used fraudulently. Ideally, the phantom credit files attached to her son's number will be deleted and he won't have any difficulty obtaining credit on his own once he comes of age. But there's no guarantee the issue will be resolved that cleanly. The experience has been eye-opening for the now more vigilant Smith. "I have a 14-year-old daughter and now I have to watch out for her credit as well," she says.
Many parents don't realize how vulnerable their children are to identity theft. Typically, a child is issued a Social Security number soon after they're born. Parents need that number for tax returns, but beyond that, it isn't really put to use until the child first applies for credit or a job when they're 18 or older. As a result, if someone uses the child's number — whether in combination with their real name or using a fake one — the fraud could go undetected for years. "It creates an 18-year window of opportunity," says Linda Foley, founder of the Identity Theft Resource Center, a nonprofit organization that helps victims.
No one knows for sure how many children become victims of identity theft. In 2005, roughly 5% of all identity theft complaints received by the Federal Trade Commission were about victims 18 years old or younger. But that might be a significant underestimation since not everyone files a complaint with the FTC. For example, a large portion of child identity theft cases remain unreported because the thief is a parent or close relative. "If the perpetrator is the parent, they won't be calling," Foley says.
In Mesa, Ariz., the Smiths' brush with identity theft is just one in a recent string of similar cases that Helen Simmonds, a detective in the local police department, has been handling in the past months. She notes that almost all involve Social Security numbers issued in the early 1990s to children who are now turning 16, 17 and 18, and trying to obtain credit for the first time. "We think there's going to be an epidemic [of such cases]," she says.
Prevention: Credit monitoring
With all that in mind, it's no surprise that credit-monitoring services are beginning to target concerned parents, offering to monitor their child's identities for just a few bucks. At LifeLock, credit monitoring for your child costs only $25 a year in addition to the $10 monthly charge for adults.
Sounds like a deal, but parents can easily avoid these costs by doing the job themselves, for free, says Adam Levin, chairman of Identity Theft 911, a company that works with institutions, such as banks and credit-card companies, to provide identity theft prevention and resolution services to their customers.
LifeLock, for example, requests a child's credit report once a quarter, according to Todd Davis, the company's CEO. Parents can do that themselves, and if there is no report for the child, they won't have to pay a dime. (Keep in mind, the procedure for requesting children's credit reports is slightly different than those for adults. See table for details.)
"The important thing for parents is to periodically run reports through the credit bureaus," Davis says. "If nothing comes back, you're fine." If the bureau finds a report but is unable to confirm your child's identity, that's a red flag. A perpetrator might be using your child's number with a different name, or your child's name and number, with a different address.
There is one exception: Experian's recently launched FamilySecure monitoring service will alert parents as soon as anyone applies for credit using their child's name. But at $19.95 a month, the cost is steep.
LifeLock also claims to "audit the Social Security Administration" once a year to find out if there's been any work history reported for the child's number. An SSA spokesman says parents can simply call their local Social Security office and get that information, also free of charge. Keep in mind, if an impostor is using your child's Social Security number, but with a different name, the SSA will not find a matching record for your child.
Disaster response: Navigating the credit bureau maze
What if you find that your child has been a victim of identity theft? The credit bureaus claim this shouldn't have harmful consequences if parents follow the necessary procedures to report the fraud. "We can investigate to see if the child's information has been used and if it has, we can prevent it from being used in the future," says Clifton O'Neal, a spokesman for TransUnion, one of the three major credit bureaus. The procedures, however, differ widely among the credit bureaus and can be frustratingly confusing.
At Experian, for example, as long as parents provide a police report they can place what is known as a "victim statement" on their child's credit file. That means the bureau will attach a note saying the credit information belongs to a minor and warns creditors not to approve credit applications until the child turns 18. TransUnion will "cloak" the victim's file, hiding it from creditors entirely. Equifax said it will delete any fraudulent information from the child's report, take it offline and flag the Social Security number as belonging to a minor, so it cannot be used until the child turns 18.
Bottom line: If your child falls prey to identity thieves, calling just one of the credit bureaus — a common scenario in adult identity theft cases, since each bureau is required by the Fair Credit Reporting Act to inform the other two — isn't sufficient.
Carol Gomez, a homicide detective in Mesa, Ariz., experienced this firsthand when her car, an unmarked police vehicle, was stolen earlier this year while she was on duty. The car was later found, but her purse was missing, along with both her and her 11-year-old son's Social Security cards. The credit bureau she contacted placed a security flag on her credit file, but not her son's, since he didn't yet have a file. "They said that since he was a juvenile, they wouldn't be able to put an alert on his file," she says. "They didn't act like it was a big deal. And we know that it is."
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Except for using Lifelock as a source (other than for marketing) which is a questionable decision, overall this is a useful article.
Child victims of identity theft more often are made a victim by a family member than not. It is increasingly the case that identity theft perpetrators are looking for children's Social Security Numbers as part of a synthetic identity theft, a routine utilizing various alias identifiers merged together. This sort of fraud is harder to track down and the credit bureaus disclosure policies often conceal the fact from a consumer their SSN has been used with an alias name.
When a consumer becomes a legal adult and applies for credit after their SSN has been used previously, they can find it quite difficult to establish their true identity. The perpetrator often appears on the credit report and in skip tracing as the true consumer. Correcting the problem of minor identity theft is a time consuming process and not what one wishes on a young person beginning their adult life.