By Chuck Gallagher, Business Ethics Speaker & White-Collar Crime Prevention Advocate
Child identity theft is not just a silent epidemic, it’s a ticking time bomb that many parents are unaware of. With nearly 1.25 million cases of identity theft involving minors reported each year, according to recent studies, the issue is far more prevalent than we realize. Unlike adult victims, children may go years without knowing their identities have been compromised, making them prime targets for fraudsters looking for a blank slate. As a business ethics speaker focused on preventing white-collar crime, I believe it’s vital for parents to be aware of how child identity theft happens, what warning signs to watch for, and what steps they can take to prevent it.
How Child Identity Theft Occurs
Children’s Social Security numbers (SSNs) are highly desirable to identity thieves because they are often unused. Once a criminal gets this information, they can open credit cards, apply for loans, or even take out mortgages in the child’s name. The consequences can be devastating, and often, the fraud isn’t discovered until the child applies for credit as a young adult.
Here are some common methods thieves use to steal children’s identities:
- Family Fraud: Disturbingly, one of the most frequent sources of child identity theft comes from within the family. A parent or relative in financial distress may use the child’s personal information to open lines of credit. This betrayal of trust can have long-lasting effects on the family dynamic and the child’s financial future.
- Cybercrime: Children are increasingly vulnerable online, where identity thieves prey on their lack of knowledge about privacy. From social media to gaming platforms, kids may inadvertently share personal details that cybercriminals can exploit. Phishing emails, fake websites, and compromised devices are all common tactics used to gather a child’s sensitive information.
- Data Breaches: Large-scale data breaches in schools, healthcare systems, or other organizations that store children’s personal information are becoming more common. If these institutions fail to secure data properly, hackers can access entire databases of SSNs, birth dates, and other personal details.
Warning Signs to Watch For
Child identity theft often goes undetected for years because children don’t typically apply for credit or loans. However, there are certain red flags that parents should be aware of:
- Credit Card Offers: If your child starts receiving unsolicited credit card offers in the mail, this could be a sign that their SSN has been compromised.
- Calls from Debt Collectors: If debt collectors start calling for your child or you receive notices about unpaid bills in their name, it’s a major red flag. This usually indicates that someone has used their identity to rack up debts.
- Problems with Government Benefits: If your application for government benefits for your child is denied because the benefits are already being paid under their name, this could indicate that their identity has been stolen.
- Difficulty Opening Financial Accounts: If you try to open a savings account or college fund for your child and are told they already have a credit history, you should investigate further. Children shouldn’t have a credit file unless someone fraudulently uses their identity.
Why Children Are Easy Targets
The fact that children don’t use credit makes them attractive to identity thieves. A child’s SSN is essentially a blank canvas for a criminal to paint a financial picture that can go unnoticed for years. When the child becomes an adult and applies for their first credit card, they may discover that they’re saddled with debt and a damaged credit score. The long-term consequences of this kind of theft are severe. Young adults may be denied student loans, mortgages, or even jobs due to bad credit that they never knew existed. Cleaning up the mess can take years and involve significant emotional and financial stress.
The long-term consequences of this kind of theft are severe. Young adults may be denied student loans, mortgages, or even jobs due to bad credit that they never knew existed. Cleaning up the mess can take years and involve significant emotional and financial stress.
How Parents Can Prevent Child Identity Theft
As a parent, there are several steps you can take to protect your child’s identity from being stolen:
- Safeguard Personal Information: Only share your child’s SSN when absolutely necessary. Many organizations ask for it as a matter of routine, but you can often push back and use an alternate identifier. Be selective about who gets access to your child’s sensitive information.
- Monitor Your Child’s Credit: Contact the major credit bureaus—Equifax, Experian, and TransUnion—and check to see if your child has a credit report. If they do, it’s likely an indication that their SSN has been compromised. You can then place a credit freeze, which restricts access to your child’s credit report, making it more difficult for identity thieves to open new accounts in their name.
- Educate Your Child About Online Privacy: As your children grow older and begin to use the internet more, it’s essential to teach them the importance of keeping personal information private. Encourage them not to share their full name, birth date, or address on social media or gaming platforms, and ensure they understand the dangers of clicking on unknown links.
- Monitor for Red Flags: Watch for the warning signs mentioned above. Stay vigilant, whether it’s unsolicited mail, suspicious phone calls, or unexpected credit activity. Early detection is key to minimizing the damage of identity theft. By staying alert and monitoring for these red flags, you can take proactive steps to protect your child’s identity.
- Secure Sensitive Documents: Securely store your child’s important documents, such as their birth certificate and Social Security card. Don’t carry these documents in your wallet or purse, where they could easily be lost or stolen.
What to Do if Your Child’s Identity is Stolen
Quick action is critical if you discover that your child’s identity has been stolen. Here’s what you should do:
- Contact the Credit Bureaus: Immediately report the identity theft to all three major credit bureaus. Request a credit freeze on your child’s account to prevent further fraudulent activity.
- File a Report with the FTC: The Federal Trade Commission (FTC) can help you deal with identity theft. Visit their website and file an identity theft report. The FTC will provide you with a recovery plan and resources to help resolve the situation, including guidance on steps to take and forms to fill out.
- Notify Financial Institutions: Contact the institutions involved if fraudulent accounts have been opened in your child’s name. Provide documentation to prove the fraud and work with them to close the accounts.
- Keep Detailed Records: Document every step of the process, including dates, names of people you spoke with, and any relevant communications. These records will be vital if you must escalate the situation or pursue legal action.
Conclusion: Awareness is the Best Defense
Child identity theft is a growing problem that can have lasting consequences for your child’s financial future. By staying informed, monitoring for warning signs, and taking preventative measures, you can protect your child from falling victim to this invisible crime. As parents, we are responsible for safeguarding our children’s personal information and teaching them how to defend themselves in the digital world.
Have questions or concerns about child identity theft?** Feel free to leave a comment below or seek more advice on protecting your family from this hidden threat.
By Chuck Gallagher, Business Ethics Speaker & White-Collar Crime Prevention Advocate
