Child Identity Theft, ID Fraud - Children

It might seem absurd to think of a five year old child with a seventeen page credit history, but it's been known to happen. In a world where a social security number is all identity thieves need to unlock the door to wealth, children are prime targets. In 2006, the Federal Trade Commission (FTC) released a report stating that 5% of all identity theft victims were under the age of 18. That means that up to 50,000 children could be victims of identity theft each year without their parents having any idea. Since children don't generally have any credit history, and they won't attempt to use their own credit for many years, thieves can usually get away with identity crimes against children for longer periods of time. Then when a child turns seventeen or eighteen and goes to apply for a school or auto loan the crime is discovered, and the teen is denied credit due to his or her negative history.  

If six year olds with mortgages and nine year olds with auto loans aren't enough to concern you, identity thieves have also been known to use children's social security numbers to claim other people's children on their taxes (to gain a deduction) and to check into hospitals to undergo expensive procedures with no intention of paying their own medical bills. If your children are small you might think they aren't at risk, but anyone with a social security number is vulnerable. Here are five ways you can protect your children.

1. Be selective about what institutions you give your child's social security number to.

From the time your children are very small there are many different legitimate people and agencies that will try to obtain your children's personal information. Doctor's offices, schools, daycare centers and even some recreational sports leagues all commonly ask for social security numbers or copies of a child's birth certificate. But before you readily give out this information stop and ask yourself if it's really necessary for each particular person or organization to have your child's information.

In some cases, like with the doctor's office, you will likely have to provide that information before your child can be treated. But, you can ask your doctor's office how they dispose of and store patient information. Dumpster diving behind banks, doctor's offices and other businesses is a common practice among identity thieves and you want to make sure that the form you are writing your child's social security number on isn't going to be carelessly tossed in a trashcan after the information is entered in a computer. Only give your child's information to institutions who take the proper precautions (like shredding forms that are no longer needed) to protect your family.

Schools and daycare centers will more than likely have to enroll your child even if you don't provide a social security number so it's a good idea to leave that field blank if you are able to. Many identity thefts occur because of dishonest employees who obtain people's private information by snooping around in files they aren't authorized to view at their place of work. So, the fewer places your child's information is recorded the safer your child is.

2. Don't be too trusting with close friends and relatives.

Many documented cases of identity theft tell the sad tale of a child whose credit has been ruined by a close family friend or relative who had access to the child's social security number or other personal information. Even in close families only parents or legal guardians need to know a child's social security number. And parents need to memorize their children's social security numbers (along with their own) instead of carrying that information with them for when they might need it.

Your children's social security cards and birth certificates should be locked away in a secret place that nobody but you and your spouse know about. If you are worried about people not knowing where to find that information in the event that you died unexpectedly, you can have the location of your important documents written into your will. When it comes to your children's identities—and your own—you can never be too careful.       

3. Warn your children of the dangers of giving out personal information—especially online.

In a day when elementary school students have their own cell phones and email accounts you can't start educating your students about the dangers of identity theft too early. Discourage your children from using personal information like a birth date, social security number or mother's maiden name as a password or username for any online accounts. Thieves who are able to hack into systems can easily obtain this information about your child and use it to piece together everything they need to know to steal your child's identity. Also educate your children about not giving out personal information in chat rooms or on sites like MySpace and Facebook which allow members to make their addresses and phone numbers public to anyone who views their profile. Check your children's profiles regularly so that you are aware of what information they are giving out to people.

Even though your children may not have bank accounts yet, warn them of email tricks that identity thieves use such as sending official looking emails from companies like Ebay, PayPal or other similar institutions in an effort to try to get people to disclose their personal information. Even if your children have accounts with these places encourage them to only give their information out when they have gone to a website directly (and not followed a link).    

4. Teach your children to protect their personal information the way they would cash.

As your children get older and they become preteens and full blown teenagers, it's important that you teach them the importance of keeping an eye on their stuff. Wallets, purses and even cell phones can provide identity thieves with ready access to a huge pay day (at your child's expense). Train your children to keep a close eye on their stuff by watching for moments when they may not be looking and quietly "steal" their phones, wallets or purses and seeing how long it takes them to notice. Exercises like this can be great conversation starters that will really help drive the point home for your older children.

When your children are old enough to apply for their first job, teach them the importance about being selective about who they give their social security numbers and other personal information to. Help them memorize their own social security numbers instead of carrying their cards with them and train them to ask all potential employers how their private information will be protected. What may start out as an innocent first job could turn into a real nightmare if your child's personal information gets hijacked by an identity thief who has been lurking in the background just waiting for the right victim to come along.    

5. Check your children's credit reports annually when you check your own.

Each year all three major credit agencies (Experian, Equifax and TransUnion) allow each person with a social security number to obtain one free credit report. Since each person has access to three reports a year (one from each agency) it's recommended that you check your credit every four months to make sure there is no suspicious or fraudulent activity. When you check your credit, you should also obtain a free credit report for each of your children. If everything is normal, your child's report should be blank. If an identity thief has stolen your child's identity the credit report will tip you off and hopefully you can reverse the damage quickly and without a lot of hassle.

Some people laugh it off as a mistake when their children begin receiving credit card offers and other similar material in the mail. But it really isn't a laughing matter. If your child starts receiving mail like that it could be a telltale sign that his or her identity has been stolen and you should check your child's credit report immediately.

When it comes to identity theft, protecting your child can take on more forms than one. For smaller children the emphasis is on protecting them from being vulnerable to having their identities stolen. As a person with access to everything there is to know about your child it's important that you guard his or her information the same way you guard your child. But as children get older, it's also important that you begin to teach your children how to protect themselves from identity thieves. There will come a day when your children will be on their own. Hopefully, because you taught them well, they will be just as protected then as they were when they were under your wing. It's never too early to begin protecting your children's identity. Start today by visiting www.annualcreditreport.com and obtaining a free copy of each child's credit report.