There’s no question that if you are a parent to a minor child, in today’s world you have your hands full. Not only are there the traditional parent responsibilities, but in today’s world, because of technology, you have additional issues that parents didn’t face in the past. One of those additional issues that you need to be concerned with is children’s identity theft. Last year, more than a million children were victims of identity theft and, in fact, Experian, one of the credit reporting agencies, has said that children’s identity theft will affect 25% of all kids before they turn eighteen. When a child’s identity is stolen, the challenge to correct the problem is substantial. In fact, in many cases, it is much more difficult to resolve the issue than it is when an adult has their identity stolen. As a result, as parents in today’s world, you now have an additional burden to protect your child’s identity.
There are a number of reasons why identity thieves target children. First, if nothing more, it may take years, or even a decade, to discover the crime. Your child may not discover that their identity was stolen until they apply for a job, financial assistance or a credit card. In addition, because children’s credit reports are clean, it is easier for the thieves to actually do more, because let’s face reality, most adult’s credit reports are not clean. Adults may have issues, such as late payments or defaults, where children would not.
Once a cyber thief gets your child’s social security number, they have free reign. They can open charge cards, apply for government benefits, get a driver’s license and even file a tax return seeking a refund using your child’s social security number. We all know that there is nothing that you can do that would one hundred percent protect your identity or your children’s identity from crooks. However, you can put up some speed bumps that will make it more difficult.
One of the most important things you can do to protect your child’s identity is to protect their social security number. It is not unusual for schools, doctor’s offices, summer camps and other out of school programs to request your child’s social security number. My advice is that if someone asks for your child’s social security number, the first answer should be no. Many organizations and companies ask for social security numbers, but they don’t actually need it. Therefore, before you give out a child’s social security number, you should inquire as to why they need it and if there are alternatives. In many situations, you can use an alternative number as opposed to a social security number or even just provide them the last four numbers. I would also tell you that in many situations, as opposed to providing your child’s social security number, you may have to walk away from that company. Particularly, if that company requires you to provide a social security number, but they cannot satisfy you as to what steps they take to protect it.
Another thing you can do to protect your child is to look for red flags. If your child is receiving numerous credit card offers, calls from collection agencies, or bills coming in your child’s name, it may be a sign that someone has stolen your child’s identity. In those situations, you need to contact the three major credit reporting agencies, Equifax, Experian and TransUnion, to see if your child has a credit file. If your child does have a credit report, you want to work with the credit reporting bureaus to clean it up and then to freeze their credit. FYI, if your child does not have a credit report, then that actually is good news, because having one may indicate problems.
I also recommend that it probably is a good idea for parents to check their child’s credit report right before they turn sixteen. The reason is quite simple, and that is if you find that they do have a credit report that contains errors, you have time to correct it before your child begins applying for credit or when they apply for a job.
It is unfortunate that children are targets for identity theft; however, it is what it is. Therefore, it is important as parents to recognize this and take steps to protect your child. The sooner you begin taking action, the better protected your child will be.
Rick is a fee-only financial advisor. If you would like Rick to respond to your questions, please email Rick at email@example.com.