Here’s a quick thought experiment: take a moment to visualize the perfect victim for identity theft. Who do you picture? The high roller with more dollars than sense, overflowing with credit cards and unexamined bank statements? The isolated senior with sterling credit, a lifetime of savings and increasing cognitive difficulties?
While it’s true that scammers will cheerfully pillage either of those people, you’re overlooking a demographic that offers lots of scope for long-term fraud: children. Child identity fraud is a huge and growing problem, one that’s often harder to detect than fraud perpetrated against an adult. Here’s how it happens, and what to do about it.
Why Identity Thieves Target Kids
Identity thieves often try to take advantage of their victims’ credit or fraudulently drain their savings. So why would they target kids, who typically don’t have either of those things? The answer is simple: it’s about their Social Security number. These are created for every new birth but then typically go unused until the first time your kid goes looking for a job. That’s usually a lot of years after the number is issued, which gives scammers plenty of time to get their money’s worth from it.
With data breaches pumping hundreds of millions of records into the shady online marketplaces of the “dark web,” plus all of the other ways personal information can go astray, it’s not hard for criminals to buy or steal kids’ SSNs.
Once it’s in the wrong hands, a Social Security number can be monetized in several ways:
- Someone could use it to work illegitimately.
- It could be matched up with fictitious personal details, becoming part of a “synthetic identity” that’s exploited by criminals for years.
- An adult might use your child’s name and SSN to acquire and build (and then potentially abuse) credit.
- You could even get a notice from the IRS that you can’t claim your child as a dependent, because someone else has already done so.
The Most Heartbreaking Form of Child Identity Theft
There’s one aspect of child identity theft that deserves a special mention, precisely because it’s such an uncomfortable topic (downright heartbreaking, in fact). We’d like to think that identity theft is carried out by faceless, anonymous hackers and international crime rings, but the hard truth is that people close to the child have the most opportunity to do this.
It’s called “familiar” identity theft, because it’s perpetrated by someone within the family circle. That might be a parent, a caregiver, a member of the extended family or even just a friend or neighbor. These are all people who have, or might conceivably finesse, access to the child’s personal information. Often they’ll rationalize their actions, and persuade themselves their fraud is justified or appropriate, but it’s a betrayal by any objective standard.
The steps required to recognize, uncover and prevent child identity theft are the same no matter who the perpetrator is. It’s just emotionally harder if you trace the crime back to someone you’ve trusted.
Detecting Child Identity Theft
The most direct way of checking whether your child’s SSN has been compromised is to reach out to the major credit-reporting agencies. If they have a file corresponding to your minor child’s SSN, and there’s no reason you know of for such a file to exist, then something’s wrong. Periodically searching your child’s name — and phone number and email address, if they’re a bit older — with Spokeo’s people search tools can also give you some early warning that your kid has a fraudulent adult counterpart.
Other tell-tale indicators of child identity theft include:
- Correspondence in your child’s name from the SSA or the IRS
- Statements, credit card offers or other financially related mail addressed to your child in their own name
- Collection calls asking for someone with your child’s name
- Notification from the IRS that your dependent has already been claimed on someone else’s return
- Denial of a benefit (on your medical insurance, or the recent COVID stimulus benefits, for example) because it’s already been paid out.
The very worst way to uncover child identity fraud is when your child comes of age and needs to open an account, apply for jobs and rentals or get a driver’s license or student loan. All of these normal rites of passage become infinitely complicated if someone else’s problematic 12- or 15-year credit history is attached to your child’s SSN.
Preventing Child Identity Theft
If you see no signs of child identity theft (yet), you can take several proactive measures to reduce the likelihood of it happening. The first and most important is to lock down their credit with the three main reporting agencies. The process isn’t the same as initiating a freeze for an adult, so you’ll need to look at the instructions from Equifax, TransUnion and Experian separately. According to Eva Velasquez, the CEO of the Identity Theft Resource Center, it’s the single biggest thing you can do to protect your child from identity theft.
Other useful measures include the following:
- Securing your child’s physical Social Security card. Don’t carry it around with you, and don’t leave it lying around the house either. Keep it in a safe in your home, or ideally a safe-deposit box at the bank.
- Not giving your child’s SSN unnecessarily. One of the reasons you might carry your child’s Social Security card is for filling out forms. Often that field isn’t mandatory — it’s there for the asker’s convenience — so feel free to question why they need it; and don’t give it out without good reason.
- Being mindful of other compromising materials. The physical Social Security card isn’t the only place your child’s SSN might be found. It can also show up on some correspondence (medical bills or insurance statements, perhaps) or on old devices that you’re reselling or recycling. Any paperwork containing the SSN should be shredded or securely stored, and devices should be erased or destroyed.
- Dialing back your public social-media posts. Posting about our kids is one of the things parents do on social media, but you need to think hard about what you post and who can see it. Stealing (or buying) a crucial piece of information like a credit card or SSN is only part of acquiring a stolen identity; other details — mother’s maiden name, place of birth — are also useful. The more of those you make publicly available, the easier it is for someone to steal your child’s identity.
Recovering From Child Identity Theft
If you discover that someone has used your child’s identity fraudulently, there are several steps you’ll need to take as quickly as possible. Getting a credit report from each of the three main agencies is a good starting point, because it can help you identify the companies that have been scammed.
Reach out to them all, and inform them that the account was opened fraudulently. You may be required to provide some supporting documentation, and in exchange you should always request written confirmation that neither you nor your child is responsible for the account. If that account has been sold for collection, you’ll also need to contact the corresponding collection agency and repeat the same steps (this can sometimes take a while).
Report your case at the FTC’s IdentityTheft.gov site, which will also walk you through creating a step-by-step recovery plan. These steps might include:
- Filing a report with your local law enforcement and/or the FBI’s Internet Crime Complaint Center (IC3)
- Placing a security freeze on your child’s SSN at each of the three main credit-reporting agencies, which will help restrict scammers from using your child’s ID
- Contacting the National Consumer Telecom & Utilities Exchange (NCTUE), the little-known credit agency used by phone carriers and utilities companies; like the Big Three, they can place a security freeze or fraud alert on your child’s identity
Keep copies of all of your correspondence with each of these companies or agencies, in case of disputes.
Someone Claimed My Child on Their Taxes Without My Permission
Unless you’re co-parenting or your child is being raised by a guardian, getting a notification from the IRS that someone else has claimed your child as a dependent is a nasty shock. Because the IRS has to treat every fraud claim as “alleged” fraud — for privacy reasons — this scenario is a special case. You’ll have to jump through a few extra hoops to straighten it out.
The IRS has a page on its website specifically to walk you through this exact process, which will take at least a couple of months. You can’t use the normal process to request a copy of the fraudulent return, which would apply had your identity been stolen.
Parenting is largely about protecting our kids until they’re old enough to make their own decisions, so shielding them from identity theft is just one more aspect of parenting in the modern world. Preemptively locking down their SSN and credit files, talking with them about online safety and oversharing (“Someone you’ve been messaging with for a month but never met in person is still a stranger…”) and maybe even installing an app that gives you some measure of control over their devices are all things to think about.
The day will come when you have to let them leave the nest and fly solo, but keeping a watchful eye on their identity in the meantime will help make that first flight a smooth one.
- Identity Theft Resource Center: How to Fight Child Identity Theft (Infographic)
- FICO Blog: How to Protect Your Children From Identity Fraud
- US Government Accountability Office: Watching Out for Synthetic Identity Fraud
- MalwareBytes: Child Identity Theft, Part 1: On Familiar Fraud
- Journal of Financial Counseling and Planning: A Phenomenological Study on Parental Perpetrators of Child Identity Theft; Axton Betz-Hamilton
- MalwareBytes: Child Identity Theft, Part 2: How to Reclaim Your Child’s Identity
- Equifax: Freezing Your Child’s Credit Report: FAQ
- TransUnion: Credit Freeze FAQ: Freeze a Loved One’s Credit
- Experian: Security Freeze on a Protected Consumer’s Personal Credit File
- SAS/Identity Theft Resource Center: Child Identity Theft Revealed in Denied COVID-19 Benefits
- IdentityTheft.gov: Report Identity Theft and Get a Recovery Plan
- US Federal Bureau of Investigation: Internet Crime Complaint Center (IC3)
- National Consumer Telecom & Utilities Exchange (NCTUE): Consumers
- US Internal Revenue Service: What to Do When Someone Fraudulently Claims Your Dependent
- US Internal Revenue Service: Instructions for Requesting Copy of Fraudulent Returns
- Tom’s Guide: The Best Parental Control Apps for Android and iPhone 2021