Child ID Theft: When Ignorance Isn't Bliss
What if the Social Security number (SSN) assigned to your child already has been used illegally? From the day he or she was born, your child would be a victim of identity theft.
It sounds preposterous, but that's exactly what happened to Michelle Dennedy's daughter.
"We found that 11 years before she was born someone had opened a credit account with her Social Security number," Dennedy says. "So she had a credit file before she was even born."
Dennedy, an information privacy and security professional in Palo Alto, Calif., found out because she agreed to have her children's records scanned as part of an experiment run by private ID protection company All Clear ID, Austin, Texas. Dennedy got involved to help analyze the data and to help promote the security services. She never expected to discover that her own family had been victimized.
In fact, two separate criminals had used her daughter's Social Security number on two separate occasions. The second incident involved an individual who used the number to establish utility services in Arizona and then skipped town without paying the bill.
Dennedy went on a letter-writing campaign to the credit-reporting agencies to clear up her daughter's records. From what Dennedy has been told, there is a letter in her daughter's credit files indicating that all previous activity was fraudulent. Yet it concerns Dennedy that her daughter has to even have a credit file since it is illegal to make loans to children. And it bothers her that she has never seen a copy of the letter supposedly setting things straight.
"It's very unsatisfying," she says. "I'd like to see a lot more transparency in the system."
The same screening test that uncovered Dennedy's daughter's ID theft produced alarming results: Of the 42,000 records scanned, more than 10% were marred by illegal activity.
"It's really stunning," says Bo Holland, All Clear ID founder and CEO, who notes that the thieves who steal the SSNs use the child's name only 4% of the time.
Anne Wallace, president of the Identity Theft Assistance Center, Washington, D.C., calls this kind of fraud "synthetic identity theft" because only a portion of the individual's identity—in the case of children, almost always the SSN—is stolen and then combined with other names or birth dates.
Parents and children often offer too much personal information via social networking.
While Wallace says this can make it easier to resolve the fraud, it does make it harder to detect. Most of the time parents discover it when children apply for college student loans or try to buy their first cars. But by then the illegal activity could have been going on for years.
Rich Hamp, assistant attorney general for the State of Utah, says child ID theft can be devastating while victims work to restore credit and clear personal records of false convictions, earned wages, or medical histories. The process takes time and can force some teens to put their lives on hold. Other times it derails plans entirely.
"This isn't something that can be straightened out overnight," says Hamp.
Hamp knows ID fraud well. He was hired in 2000 specifically to prosecute Utah's ID theft statute. Over the course of his work, he discovered a mortgage fraud scheme that used stolen SSNs, many of which belonged to children. Later, he used certain state employment records to detect other child ID theft victims.
"We can see [in] the data that we've got thousands of kids in the state who are being compromised, and our data field is limited," Hamp says. "It's only kids receiving social services, and the person using the number has to be in the state using it for employment purposes...and we only look at kids 12 and under. We're looking at a pretty limited set of kids...and we're a small state."
Steven Toporoff, an attorney with the Division of Privacy and Identity Protection at the Federal Trade Commission, Washington, D.C., agrees that ID theft is a bigger problem than most people realize, and acknowledges that a lack of data makes it hard to raise awareness about it. Toporoff says there are no reliable statistics about the actual incidence of child ID theft.
"It's completely underreported because parents in many instances have no suspicion that their child's identity has been taken. Children certainly don't know," Toporoff says. "While we don't know how prevalent it is, it can be devastating when it happens to a particular family."
Don't give out your children's Social Security numbers unless you have to.
Luckily, Dennedy discovered her daughter's ID theft before it created problems, but the mother of two isn't letting her guard down. Dennedy is expecting complications when her daughter reaches college age, so she is steeling herself for the battles she anticipates. "I know it's coming, so I know what to do," she says. "I'm not that fearful, but it's upsetting that you, as a parent, have to be so vigilant."
How do you know?
Most victims get no warning signs. However, if your child receives credit preapproval letters or calls from collection agencies, that's a good sign that a credit file—an ID-theft red flag for minors—exists in your child's name.
Otherwise, any home burglary, stolen wallet (if you were carrying your child's Social Security card or any forms containing that information), or data breach at a school or medical facility where your children attend or receive treatment should put you on alert, Toporoff notes.
In the absence of a known breach or red flag, most experts recommend checking kids' records when they are about age 16. Gabby Beltran, public information officer for the Identity Theft Resource Center, discourages nervous parents from making routine credit inquiries. That can create a credit file for a child, Beltran says, and any time a file exists, it can be sold to marketers, thereby furthering the fraud potential.
What you can do
Simply safeguard your child's personal information, Toporoff says. Don't carry Social Security cards with you, and shred any unneeded documents that contain sensitive details. Don't give out your children's SSNs unless you have to, and realize that you don't have to give it out just because someone asks for it.
In the absence of a known breach or red flag, most experts recommend checking into kids' records when they are about age 16.
"Be very stingy," Holland says. "Everybody wants your child's Social [Security number] and they don't need it." Exceptions are for health care and for some schools or financial accounts.
Wallace adds that parents and children often offer up all kinds of personal information via social networking—full dates of birth, school names, mother's maiden name— without ever being asked. Wallace says parents should think twice about sharing too many details, and they should talk to their older children about smart social-networking practices.
"Personal information is like money. It is a valuable asset," she says. "You need to think about how much information you put online."
Also, never use your child's SSNs in place of your own. In hardship, some parents use their children's SSNs to apply for state benefits, utilities, or even credit. It is illegal, and will lead to complications for children when they reach adulthood.
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