Identity theft can happen at any age, but it’s a growing problem amongst children. According to the 2018 Child Identity Fraud Study by Javelin Strategy & Research, more than 1 million children in the U.S. were victims of identity theft last year, resulting in losses of $2.67 billion. But thanks to a new federal law that went into effect September 21, 2018, parents and legal guardians of people under 16, can request a free credit freeze on their behalf.
Identity theft happens when someone misuses your personal information, such as a Social Security number, to make purchases, get benefits, file taxes or commit fraud. Scammers may prefer to target children because it’s less likely to be discovered since minors typically don’t have credit reports.
A child’s identity can be exposed through a data breach or anywhere you fill out a form with their personal information, like the doctor’s office, school and extracurricular activities. Moreover, a percentage of child identity theft is committed by friends and family members that have access to the child’s personal information.
Under the new Economic Growth, Regulatory Relief, and Consumer Protection Act, it’s free for parents, guardians and representatives acting on behalf of a child in foster care to freeze and unfreeze a young person’s credit file at the three nationwide credit bureaus (Equifax, Experian and TransUnion). Depending on the adult’s relationship with the child, there are different procedures to put a freeze in place. The credit bureaus may require copies of the child’s birth or adoption certificate, the child’s Social Security card, the parent or guardian’s government-issued identification card, like a driver’s license, and/or proof of address, like a utility bill or insurance statement.
If you think your child’s information is at risk for misuse, the Federal Trade Commission (FTC) recommends checking for a credit report. Request a manual search of the child’s file. The bureaus will check for files relating to the child’s name and Social Security number. If the credit bureaus don’t have a file on the child, they will create one so they can freeze it. The record can’t be used for credit purposes but will instead make sure the child’s record is frozen and protected against identity theft and fraud.
Better Business Bureau (BBB) wants families to be proactive in fighting fraud. If you’re questioning if your child has been affected, it is crucial to know the warning signs.
- Your family was turned down for government benefits because the benefits are being paid to another account using your child’s Social Security number.
- The IRS sends a letter addressed to the child after missed tax payments/filings.
- The child’s Social Security number was used on someone else’s income tax return.
- The child receives collection calls or bills are sent to your home in the child’s name for products and services not received.
- The child is denied a loan, apartment or credit card because of bad credit.
- The child is unable to obtain a driver’s license or denied a renewal.
To protect your child’s identity from misuse, BBB offers the following advice:
- Check your child’s credit report for incorrect information and signs of fraud.
- Limit what kids share online, use strong passwords and shred documents with personal information.
- Find a safe location for all paper and electronic records that show your child’s personal information.
- Don’t share your child’s Social Security number unless you know and trust the other party. Ask why it’s necessary and how it will be protected.
- Shred all documents that show your child’s personal information before throwing them away.
- Be aware of events that put information at risk like a break-in at your home or at your child’s school; or if a doctor’s office or business notifies you that your child’s information was affected by a data breach.
If your child has been a victim of identity theft, there are steps you can take to fix the problem. The FTC and BBB recommend the following:
Step 1: Contact companies where fraud has occurred. Tell the fraud department someone opened a fraudulent account using your child’s identity. Ask for the account to be closed and to receive a letter confirming your child isn’t liable.
Step 2: Contact the credit bureaus. Ask the credit bureaus to remove any fraudulent accounts from your child’s credit report. If needed, send a letter explaining your child is a minor who can’t enter into contracts and attach a copy of your child’s birth certificate.
Step 3: Consider putting a freeze on the child’s credit report. You can freeze a child’s credit until they are old enough to use it. The freeze will make it harder for identity thieves to open new accounts in your child’s name.