Will your son or daughter be denied credit when they apply for a first credit card? It could happen. Identity thieves are targeting kids and using their information to obtain credit cards, loans, utility services and even rental housing. They can quickly run up thousands of dollars in fraudulent charges, leaving the child’s credit record in ruins.
It’s a serious problem. According to ITAC—Identity Theft Research and Statistics—2.5 percent of U.S. households with children under 18 had some experience with child identity theft. And it’s not always a stranger who’s taking over the child’s identity. In ITAC’s survey, 27 percent of the respondents knew the person responsible for the crime.
The theft of your child’s identity can go unnoticed for a long time—an average of 344 days, according to ITAC. It took an average of 44 hours to resolve the problem.
A Social Security number is what thieves use most frequently to lift a child’s identity. While it might seem odd that credit issuers can’t figure out that a six-year old child isn’t really the one opening an account with them, the banks don’t have any good way of verifying age information, according to the U.S. government’s Identity Theft Resource Center. Since the Social Security Administration doesn’t share information about a person’s age with the three major credit reporting agencies, they also cannot tell if an account is being opened fraudulently.
Even more upsetting for families is the use of a dead child’s identity. In this scam, thieves go through old death notices until they find a deceased child who would be about the age the thieves are today. They’ll then write to the appropriate department in the child’s birth state requesting a copy of the birth certificate. (This is harder to do in some states than in others.)
The first time you or your child may learn that their identity has been stolen could be when you try to open a college savings account for them and discover that someone else is using their Social Security number. Or you may begin to wonder why your child is all of a sudden getting multiple credit card offers in the mail, or even getting calls from bill collectors demanding payments on accounts that you didn’t know existed.
If you suspect your child has been a victim of identity theft, the first thing you should do is order a copy of your child’s credit report. (The Identity Theft Resource Center offers a fact sheet that tells you how to request this information. If there is a problem, you’ll need to work each of the three credit bureaus to resolve the issue.
The ITRC doesn’t recommend that you ask for a credit report for your child unless you believe there’s a problem, however. Establishing an account for them—which is what requesting a credit report would do—would actually leave them more open to identity theft.
If your child hasn’t been hit by identity thieves, take care to protect his/her important information: