In a recent study by Carnegie CyLab the numbers were alarming with 10.2% of the children scanned having someone else using their social security number.
There was one 16 year old victim who had $750,000 in debt, and the youngest was 5 months old.
You may be wondering how a 5 month old baby gets a line of credit and why isn't it caught. Here's how it works.
1. A thief acquires the social security number from somewhere. It can come from many different places such as hospital, doctors office, camp, school, etc.
2. They use that SSN to open an account at a Walmart, Target or any other store that offers a credit card. The store has no way of knowing that the number doesn't belong to them because that number doesn't become official with the credit bureau until it is first used. They don't check it with the social security administration to verify it belongs to a 24 year old man instead of a 5 month old girl. With no credit history the charge card is usually issued to the thief and they now have a line of credit. By paying the balance they are able to receive even higher credit lines and even more cards. Eventually leaving the child with the bill.
Children make ideal targets for identity theft because years will pass before they ever apply for a credit card, car loan or even open a checking account. This gives the thieves much more time to use and abuse their credit line.
The other reason is that children have clean social security numbers so they are almost always approved for cards. Also many adults may have identity protection and its more dangerous for the criminal to use adults numbers which may alert someone to the fraud. Not too many children have identity protection because not everyone thinks it's necessary.
Be informed however that the statistics indicate children with someone else using their SSN, but it doesn't indicate whether they are actually strangers. There are many instances where parents who have a poor credit will use their children's number to get a fresh start vowing to pay the balances and maintain good credit. Be weary because often people who can't manage their finances and ruin their own credit don't suddenly become financially responsible because someone else is on the hook, even if it their own child.
The best way to handle identity theft is to prevent it. It's important to know where their SSN is being used, who sees it, and for what purpose. It's quite attractive to a teenage camp counselor to be given a few hundred dollars to pass along a copy of the child's sign up form to the thief. It's very important to let your children know to keep that information private, especially on the computer and social networks.
Other places that ask for the SSN are:
Sports or Activity Programs
Registrations for any other affiliation like religious or community events
It is also a good idea to have your child subscribe to a credit watch. Most agencies like LifeLock and Identity Guard offer adding family members to the plan which makes it easier to monitor the whole family.
If you think you or someone in your family has been victimized you can inquire through the Credit Reporting Agencies. A great place to start is the Identity Theft Research Center ITRC which offers great tips about getting things straightened out.
Some of the clues that there may be a case of identity theft is:
credit cards appearing in the child's name
collection agencies calling for the child
Not being able to open an account
Child not able to get a drivers license
When you find out either yourself or your child has been victimized you are filled with many emotions which usually include anger, frustration, fear and worry.
As a victim myself I can tell you first hand it was a nightmare proving that I wasn't the person who opened a bank account and wrote bad checks. I was 14 years old and I didn't find out until I was 18 that I was considered a delinquent banker which prevented me from opening a checking account. Being a victim goes much further than just financially but it is extremely frustrating and time consuming.
Be aware when giving your child's information and question if they actually need it and how it is handled. It is unfortunate but it is just another thing we have to worry about as a parent.
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