Children, as well as adults, are at risk of being victims of identity theft. It is a growing problem that can go on undetected longer and is harder to recover from. Unlike adults, who should be checking their bank and credit card statements and credit reports regularly, children often don’t know they have become a victim until they grow up and are denied a student loan or credit card. By then, the damage has been done and can be extensive.
David Vladeck, the Director of the FTC's Bureau of Consumer Protection, explains how a child might become a victim:
“Consider the following scenarios -- a 7-year-old's parents have died in an accident, and the child ends up going from foster home to foster home. One of the foster parents gets access to the child's Social Security number and enters several accounts in her name. Or consider this -- a hacker steals hundreds of Social Security numbers and dates of birth stored in an elementary school's database. He then opens new accounts using the students' name. Or this scenario -- a destitute relative comes to live with a family and steals the Social Security numbers and dates of birth of the kids in the household. He then uses those numbers to open several accounts. These cases, for anyone who is familiar with this field, seem common enough. In each one, the identity theft may go undetected for years.”
The Identity Theft Resources Center's website lists these red flags that might indicate your child’s identity has been stolen.
- Calls from collection agencies, bills or credit cards sent to your home in your child’s name.
- Pre-approved credit card offers if your child has never had a bank account.
- A person who knows your child’s SSN has had financial problem, suddenly “found” a lot of money.
- If the child gets a notice about a warrant for a traffic violation or for taxes owed or a lien on income.
- Your child, or your family, is denied a governmental assistance program because “income, already getting benefits, etc. is already assigned to the child’s SSN”. You might also be told they want to “verify his/her job” and the child has never worked.
- A notice from the IRS that your child’s name and/or SSN is already listed on another tax return.
What you can do
First, don’t carry your child’s Social Security card in your wallet (or your own for that matter).
If you suspect your child is a victim of identity theft, request a credit report. If a credit report doesn’t exist, that’s good news. Files are created based on information reported by creditors, so if you’ve never had a job or applied for a credit card or loan (or had your identity stolen), you won’t have a credit report.
If a credit report does exist for a child, it’s only because of fraud. In that case, the parent or legal guardian can freeze the child’s credit file. However, credit bureaus don't have the ability to create a file for a child because a parent wants to place a preventative freeze.
Related post: What to do if you’re a victim of ID theft