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Child Identity Theft: A
Growing Concern
By John Sileo
sileo.com
Are you as protective of your kids as I am of mine?
My wife and two highly-spirited daughters are more than just the center
of my universe - they are the compass by which I set my course in every
aspect of life. If something is not good for the family, then it isn’t
good for me. And that means that I want to do everything in my power to
keep them safe.
You and I are called on to protect our children from many things,
starting in the womb. Even before they are born, we practice good
preventative care. We take specially designed pre-natal exercise
classes, coax ourselves to eat right for their benefit, learn CPR and
Love and Logic and screen regularly for signs of trouble. Once they are
born, we provide the best nourishment, the finest medical care, ample
playtime, rest and an infinite flow of unconditional love. You get the
point… we do everything in our power to prevent complications and to
give them the best chance to grow up healthy, happy and in harmony with
the world around them. That is our responsibility, our purpose and our
joy.
But how often do you check their credit report?
Their WHAT?! I can feel the surprise in your blank stare. I can hear
your questions: "Check my kid's
…credit report? But she is only seven! She doesn't even have her front
teeth yet, let alone a credit card! There are so many years to go
before we need to worry about that. Right?"
Unfortunately, no. Because children have untouched and unblemished
credit records, they are highly attractive targets. Thieves steal a
child's identity early on, nurture it until they have a solid credit
score, and then abuse and discard it.
How Does it Happen?
All an identity thief needs to ruin your child's bright financial
future is her name and Social Security Number. "Shouldn't my
child's age show up on any credit background check, shouldn't the
merchant recognize that the person in front of them buying a car on
credit isn't seven years old?" you ask. Yes, it should, but the people
screening the credit report rarely give it the time and care necessary
to detect fraud.
All too often, background checks involve simply matching the name and
the Social Security Number provided. This leaves doors wide open for
scandalous minds to wreak havoc on your child's perfect credit. The
most unsettling part is that the age
of the applicant (in this case, the person posing as your child)
becomes official with the credit bureaus upon the first credit
application. This makes clearing a sabotaged credit record even
more difficult because you have to prove to the credit bureau that your
child is only seven and isn't responsible for thousands of dollars of
debt.
In no time at all, your child could have a maxed out credit card,
unpaid bills and a huge mortgage for beachfront property across the
country. You might not discover the illegal purchases until your child
opens a bank account, applies for a job, tries to get a driver's
license or enters college. At that point, you are left with the
time-consuming dilemma of cleaning up someone else's fraudulent mess.
If only clearing up a credit report was as easy as cleaning up after
your kids.
Do the gaping holes in our current credit system and the audacity of
criminals leave you enraged? Me too. And it is imperative that you use
your anger as fuel to protect and prepare your children's future before
it is too late.
Child Identity theft is the fastest growing sector of the identity
theft "industry," and the numbers are staggering. Although it's
difficult to estimate exactly how many children lose their identities
since the crime can go undetected for years, the FTC states that 5% of
identity theft cases target children, which translates into 500,000
kidnapped child identities per year, and growing. The Identity Theft
Resource Center discovered that in 54% of the cases, the child was
under the age of six.
Who Does This?
The identity thief is not always a stranger. In many cases, it's a
relative with bad credit who takes advantage of a child's pristine
credit. Conveniently, these family members generally have access to the
information necessary to maximize the fraud with little attention.
This seems absurd, but imagine a parent who is strapped for cash, has a
bad credit score and needs to buy groceries. In this case, short-term
thinking blinds the relative or friend to long-term consequences.
In other instances, the child's future is not taken into consideration
at all.
Frankly, it doesn't take much to get the crime underway; all a criminal
needs is the child's name and Social Security Number. These pieces of
personal information are exposed in a variety of ways:
- When registering for
daycare, schools and recreational sports
- On medical, dental and
hospital records
- When joining organizations
like the Girl Scouts, Boy Scouts, etc.
- When the above information
is permanently stored and accessed by volunteers or employees
- When one of the above
organizations is breached by a hacker or malicious software
- When an adult befriends your
child on a social networking site (MySpace, Facebook) and eventually
socially engineers private information out of them
The
Three Basic Types of Child Identity Theft
Child Identity theft generally falls into these 3 categories:
1.Financial identity theft occurs
when the name and Social Security Number is used to establish new lines
of credit.
2.Criminal
identity theft happens when the criminal uses the child's
identity to obtain a driver's license or substitutes the child's
identity if caught in a criminal act.
3.Identity
cloning entails using a child's identity (via information
collection or a black market ‘purchase' of personal information) for
financial, criminal and governmental purposes. The most common form of
cloned identity theft is committed on behalf of undocumented workers
looking for an identity that will keep them working in this country.
For parents, cleaning up the disaster of identity theft for their
children is costly and incredibly time consuming. Getting a new Social
Security Number is almost impossible, and rarely the best option.
Taking steps right now to protect
your child from this horrible crime is one of the greatest investments
you will ever make in their financial and emotional future.
Protecting Your Children
Acting now on behalf of your child will protect them from consequences
common to child victims:
- Starting adulthood with a
credit rating low enough to scare away the hungriest of loan sharks
- Being denied a first loan,
credit card or apartment rental because of a crime committed 10-15
years earlier (the passage of time makes this crime very hard to clear
up)
- Being denied access to
college or a new job
- Having a warrant out for her
arrest for crimes that she didn't commit
In the same way that you can't
protect your children from every bruise and scrape, you can't entirely
remove the risk of identity theft. You can, however, prevent or soften
the fall if it does happen. Take these steps first:
- Stop giving out your child's personal
information. Until you are confident that it is absolutely
necessary to receive the services desired, withhold their personal
information. More than 80% of organizations that ask for your child's
Social Security Number don't actually need it to establish services. If
you must give it, ask them how they will use it, how long they will
keep it and how it will be protected while they have it. Vigilance is
highly effective. Never carry your child's SSN with you.
- Order a free credit report for your child
at least once a year. All three major credit reporting bureaus
(Equifax, Experian and TransUnion) offer one free credit report per
year per individual. Order one for your child at the same time you
order yours and review them both for any red flags indicating
fraudulent activity. I recommend that you order the first one (Equifax)
right now; order a second report (Experian) in 4 more months; order the
third report (TransUnion) four months after that and then repeat the
process the following year. For a more convenient option, use an
identity monitoring services for you and your family.
- If you find evidence of fraudulent
activity, contact the police, the source of the fraud and all three
credit bureaus. Filing a police report helps to establish your
child's innocence in an official way. Have the credit bureaus FREEZE
your child's credit for maximum protection. Keep detailed records of
all correspondence between yourself, the police, the merchant and the
credit bureaus. It will come in handy should you ever find yourself in
court, as I did.
- Educate your children on the importance of
protecting their personal information. Teach them about the
value of their personal information: their name, address, phone
numbers, email address, Social Security Number and any passwords and
PIN numbers. Reinforce that they own their private information and that
it should not be shared with friends, over the internet or with anyone
whom they don't know or trust. Education is absolutely the best
financial gift you will ever give to them.
Because you love and protect your
children as much as I do, you should start this process immediately. In
the case of child identity theft, an ounce of prevention is worth a
lifetime of financial security. Don't let the center of your universe
become just another statistic.
About the author: After losing
his business to data breach and his reputation to identity theft, John
Sileo became America’s leading identity theft and data breach speaker.
His recent clients include the Department of Defense, the FDIC, Blue
Cross Blue Shield and Pfizer. To learn more about John, visit sileo.com. Permission granted for use on
DrLaura.com.
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