How to Protect Your Child from Identity Theft
When you think about identity theft, you may think about those big data breaches that seem to happen every few months, or you may even think of someone rooting around in your garbage, looking for documents with unique identifying information. When you think about identity theft, though, you’re probably thinking about your identity. Unfortunately, if you have children, you need to also be thinking about protecting their identity.
It’s estimated that one in every 50 children (1.25 million) have their identity stolen or compromised every year. And while it may seem absurd that someone could open up a credit card using your infant child’s Social Security number, it happens far too often to ignore. Even worse, if it goes undetected, it can really come back to bite your child once they’ve grown up and need to begin establishing their credit.
What can happen if your child's identity is stolen?
Identity theft typically leads to the same outcomes from adults and children alike: lots of fraud and even more headaches. The problem is that when a child's identity is stolen, it may take a long time before you even notice.
Lasting credit damage
It's hard enough for responsible adults to build a strong credit score. Imagine having your identity compromised as a child. Thieves have years to open fraudulent accounts in your name. Credit cards, loans, and even utility bills. Suddenly, trying to establish credit as an adult becomes all that much harder thanks to all of the delinquencies and negative marks in your credit report.
Digging out of that hole can take years and be extremely costly. Plus there's the added costs of having no access to credit or being limited to expensive, subprime credit products.
Worse, that poor credit may cost you more than money if it disqualifies you from job or housing opportunities.
Complicated legal issues
A stolen identity can be abused in any number of terrible ways. In a worst case scenario, this could include thieves using your child's identity to commit crimes (beyond the crime of having stolen their identity in the first place). As a result, your child may end up with a fraudulent criminal record, which can take years and a lot of money to fully correct.
Depending on the nature of the fraud, your child may have difficulty accessing government benefits, getting timely medical care, applying for student loans, and much more.
How to protect your child's identity
There is no foolproof method to prevent identity theft, but there are certainly steps you can take to help reduce the risk.
Safeguard personal information
First and foremost, be careful to safeguard any and all important documents and identification numbers. When providing your child’s Social Security number, be sure that you understand how it will be used. It’s also a good practice to keep any sensitive documents, including their Social Security card, in a secure location, like a safe.
Additionally, it's always a good idea to shred or otherwise destroy any documents that contain personal information (and that goes for every member of the family). This includes medical bills, school records, insurance forms, and anything else that includes sensitive information.
Limit what you share online
In an age of social media, it's pretty common to share details of our daily lives with friends and family. But that information isn't only available to your friends, and if it's on the internet you should assume that anyone who wants that information will be able to get it.
Be extra cautious when sharing information about your children online. Even seemingly benign information like your child's full name and date of birth can potentially be used by bad people to commit fraud. The more personally identifiable information you share about your child, the easier it is for someone to create fraudulent accounts and profiles using your child's identity.
You'll also want to make sure that you teach your children about the importance of limiting what they share online. As they grow up and being creating their own online accounts, they may be unknowingly sharing information that can be used to steal their own identity.
Check your child's credit periodically
If you have no credit history, you won't have a credit report. As such, your child shouldn't have a credit report to check in the first place. If they do have a credit report, however, that's a potential sign of fraud.
To ensure that your child's identity hasn't been compromised, check with the major credit bureaus periodically to make sure that your child doesn't have a credit report. Experian, for example, has a minor request form that you can use to see if any accounts are associated with your child's personal information.
Warning signs of child identity theft
You may never expect your child's identity to compromised, but it's important that you stay alert to any potential warning signs that something's amiss. While computer errors are common and mistakes do happen, something seemingly innocuous could be a sign that someone is misusing your child's identity.
They receive credit-related offers in the mail
Your child should not be pre-approved for a Discover card. If they start receiving such offers in the mail it’s usually a sign that someone has used their identity to open credit accounts.
You receive bills for goods or services purchased in your child’s name
While it’s very possible that your son or daughter went wild on eBay or Amazon, if they claim that the bills they’re receiving are a mistake, there’s a chance their identity has been stolen. Give them the benefit of the doubt and investigate.
You’re unable to sign your child up for government benefits or services because their Social Security number is already in use
Any time your son or daughter’s Social Security number is “already in the system”, that’s a big red flag.
You’re unable to open a bank account for your child
If you attempt to open a savings account for your child, you may find that they already have an established credit history and a bad one at that. This is another sign of potential identity theft.
Responding to child identity theft
If you think your child’s identity may have been stolen, your first step should be to request a copy of their credit report from all three major reporting bureaus. Receiving a credit report for a child can be tricky, and may require that you submit multiple pieces of ID, including copies the child’s birth certificate and Social Security card, as well as the your driver’s license.
Once you have the report you can assess the damage and begin the work to repair your child’s credit and reclaim their identity. This process can include:
- Filing a police report
- Placing a fraud alert in your child’s credit report
- Filing a fraud report with the FTC
- Creating an identity theft report
- Contacting each listed creditor and asking that they remove all fraudulent charges and close all related accounts
The sooner you take these steps, the better, especially if your child is over 16 and approaching the age where they may begin applying for jobs, loans, or an apartment.
Need help recovering from a major financial setback? MMI offers free financial counseling, online and over the phone. Let our experts review your situation and provide personalized advice and resources to get you started on the road to recovery.
