By Jason Alderman
I’m sorry to report that child identity fraud is alive and well in 2014. If anything, the problem may be worsening as identity thieves devise new methods to steal – and use – children’s personal information. Most commonly, they’ll harvest kids’ dormant Social Security numbers (SSNs) and use them to illegally obtain jobs or open fraudulent bank and credit accounts, mortgages or car loans.
Many victims don’t realize there’s a problem until they later apply for a student loan, bank account, job, or apartment and are turned down because of the poor credit history someone else racked up. Some families are even hounded by collection agencies or arrested because the debts or criminal activities were so extreme.
There are no completely foolproof methods to protect your children’s identities, but here are some precautions you can take:
While it’s tempting to simply not register your kids for SSNs until they turn 18, that’s not practical in today’s world. For one thing, they’ll need one to be claimed as dependents on your taxes. You may also need SSNs for your kids to obtain medical coverage or government services or to open bank accounts in their names.
Because each person’s SSN is unique, it’s not uncommon for schools, healthcare providers, insurance companies, banks and others to require them as ID. However, don’t be afraid to ask:
- Why do they need to use an SSN – is there a legal requirement?
- Will they accept alternative identification?
- What will happen if you don’t disclose it?
- What security precautions do they take with personal information?
- Will they agree not to use the SSN as your child’s personal identification number on correspondence, account statements or ID cards?
Watch for these clues your child’s personal data may have been compromised:
- They receive preapproved credit account offers.
- They receive calls or billing statements from collection agencies, creditors or government agencies.
- You’re unable to open a bank account in their name because one already exists with the same SSN.
- They’re denied credit, employment, a driver’s license, or college enrollment for unknown or credit-related reasons.
Remember, there could be legitimate reasons why your child is receiving credit offers. For example, it could be a marketing outreach from an affiliate of your bank or because you opened a college fund in their name.
If you strongly suspect or have evidence that identity theft has been committed, you can:
- File a police report and keep a copy as proof of the crime.
- Contact the fraud units at the three major credit bureaus for instructions: Equifax (800-525-6285), Experian (888-397-3742) and TransUnion (800-680-7289).
- Notify the Federal Trade Commission (877-438-4338), whose Identity Theft site contains information on fraud alerts, credit freezes, how to work with police and much more (www.ftc.gov).
- Ask Social Security (800-772-1213) whether anyone has reported income using your child’s SSN. Search “Identity Theft” at www.ssa.gov for information.
- Contact the IRS’ Identity Protection Unit (800-980-4490).
The FTC recommends contacting the three credit bureaus around your child’s 16th birthday to see whether they have credit reports on file. (There usually wouldn’t be unless they’re an authorized user on one of your accounts.) If there is a report – and it has errors due to fraud or misuse – you’ll have time to correct it before your kid needs to use credit.
Warn your kids about the dangers of revealing personal information by phone, email, or social networking. Don’t hesitate to monitor their accounts and install parental blocking software. And remember, if they share your computer, a downloaded virus could infect your accounts as well.
Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.