Child ID Theft Rates Higher Than Adults, Harder to Detect
There's a simple reason that children are prime targets for identity theft. Kids don't generally apply for loans or access their credit records for other reasons, so child-focused scams can and do sometimes run for years undetected. They're a hacker's dream.
The Identity Theft Resource Center estimates that over 1.3 million child records containing personal identifying information (P.I.I.) get stolen annually. Would you know if your child's identity had been compromised? Researchers say, "Probably not."
How Vast is the Problem?
Each year, the Federal Trade Commission (F.T.C.), in affiliation with other law enforcement agencies, compiles the Consumer Sentinel Report that tracks identity claims agencies receive. Identity theft generally tops the list. The 2019 C.S.R. received reports of 14,200 incidents of identity theft for youths under the age of 19. But that number is merely the tip of the iceberg.
A 2011 research report from Carnegie Mellon University was the first significant effort to document the scope of child identity theft, and it's still a gold standard on the issue. It studied over 42,000 children, learning that youngsters were 51 times more likely to be victimized than their parents. A startling 10% of children surveyed had already had their Social Security number used fraudulently, too.
Case histories in the report documented vehicle registrations, utility bills, driver's licenses and even mortgages and foreclosures linked to kids' Social Security I.D.s. Sometimes multiple crimes were committed using a single child's data.
Kids often know their thief. It could be a parent, a sibling, a relative, neighbor, babysitter or friend. Research also indicates that youngsters bullied online are much more likely to be vulnerable.
Foster kids make up a unique risk group, and they're typically more vulnerable. They relocate frequently, and each foster home receives a collection of their personally identifiable information.
How Cases Unfold
For most kid victims, their teen years are still ahead of them. Those 8 or 4 years old make up a significant percentage of victims. Their S.S.N.s are pristine, and so is their credit when the scams start.
Scott Calder was just five or six when someone used his Social Security number illegally. While the Colorado youngster pursued his love of fishing, dinosaurs and youth soccer, a scammer opened a Bank of America credit card account with his S.S.N.
In Calder's case (not his real name), the fraud continued undiscovered until he opened a checking account at age 18. Then a collection agency put his name and phone number together with his misused Social Security data. That's when the collection calls began.
A third-party collection agency had purchased his debt from B.o.A. for pennies on the dollar and began hounding the student and his parents to collect. Agents accused them of deliberate, illegal acts pointing out—correctly--that the parents could have opened the account with their son's data.
With child I.D. theft, a parent or relative can commit the crime; that's still I.D. theft. Calder's case featured a different twist—synthetic theft where one S.S.N. and a different individual's name and birth date are combined.
Records of the fraud traced his S.S.N. to an East Coast recording company catering to former felons. The thief didn't use his name, just his S.S.N. Calder still has no clue who snatched his data. But he will wonder the rest of his life whether his S.S.N. is still for sale on the dark web.
The debt collector, in this case, demanded that Calder file a police report or complete a 6-page F.T.C. affidavit that required a considerable amount of personal data. He refused and demanded in return that they provide evidence of the debt. They couldn't, so eventually, the calls stopped.
How Info Leaks
Data breaches are prevalent. Some specifically target pediatricians' offices. Others tap employees on the inside to steal teen data.
The U.S. Department of Justice sent a number of these thieves to jail. Their release about the arrests and sentencings explained how miscreants convinced a man working for the Alabama Departments of Public Health and Human Resources to slip them data. The team asked this rogue worker to share data on teens aged 16 or 17 specifically.
Your child's Social Security Number (S.S.N.) and other identifying data reside in more places than you may realize.
- Schools ask for it every year at registration.
- Student aid applications ask for data from aspiring college kids.
- Hospitals often facilitate S.S.N. applications when your child is born.
- Medical offices have requested this data for years.
- Government records can be breached.
The list goes on. Next time someone asks for this data, and say NO. You'd be surprised how few agencies will insist you divulge it. If you must, ask the recipient if they encrypt all their data. That should stop a significant percentage of asks.
Impact Wide, Varied
CyLab's identity theft case studies uncovered mortgages taken out in the name of youngsters, bankruptcies and foreclosures in their names, employment fraud, and many other serious crimes that can wreck a child's credit for years to come.
With new accounts in hand, the thief will charge and pay bills for a while to build their credit score. Only then is the debt run high. Payments stop, and the scammer leaves behind a trail of insufficient credit data linked to your child.
The impact is often never felt until that child applies for student loans or attempts to rent an apartment. Employment offers, internships and utility accounts can also be denied.
College students are also a high-risk group. Numerous scams targeting them will bank on the fact that even 19-year-olds are unfamiliar with the laws regarding finances, utilities and matters like student loan repayment. They may be susceptible to fear tactics.
In response to this enduring con, 33 states have passed laws permitting parents to place a freeze on a child's credit reports. Take this step to protect your kids.
Watch for unsolicited credit card offers arriving for your kiddo.
If you get calls from collection agencies, familiarize yourself with your state's statute of limitations for debt collections. In Calder's case, it had expired years before the collection calls, but he didn't know that.
With any I.D. fraud, rapid detection is your main line of defense. IDShield offers its members a family plan that can alert you when activity impacts anyone living under your roof or away at college.
IDShield is a product of Pre-Paid Legal Services, Inc. d/b/a LegalShield (“LegalShield”). LegalShield provides access to identity theft protection and restoration services. For complete terms, coverage and conditions, please see www.idshield.com. All Licensed Private Investigators are licensed in the state of Oklahoma. This is not intended to be legal advice. Please contact an attorney for legal advice or assistance. If you are a LegalShield member, you should contact your Provider Law Firm.
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