Picture a young child with a bankruptcy on his record. Or a 17-year-old who owns several houses and cars, and carries $750,000 worth of debt. The latter child's problems are the result of eight people fraudulently using her Social Security number. Both stories are true cases of child identity theft related yesterday during a Federal Trade Commission discussion, "Stolen Futures: A Forum on Child Identity Theft."
In fact, more than 140,000 children are victims of identity fraud annually in the United States, according to a study conducted by risk-management firm IDAnalytics, whose results were released during the FTC forum.
Most of the fraudulent use of the minors' identities came from the cell phone and wireless industries, according to IDAnalytics' study. The research was based on a review of 172,000 children's accounts that were protected through the company's Consumer Notification Service (CNS). Minors who were alerted about potential privacy compromises by CNS were seven times more likely to actually experience fraud than adults who were similarly alerted, according to Tom Oscherwitz, chief privacy officer for IDAnalytics.
Other research also points to the prevalence of child identity theft. For example, children are targeted 51 times more than adults, according to Bo Holland, founder and CEO of Debix, a company that provides identity-protection services.
What puts kids more at risk for identity theft, panelists agreed, is the freshness of their Social Security numbers. Because a child's Social Security number is unused, it's easy to associate a different name and birth date with it.
Identity theft impacts a child in a variety of ways, particularly once he or she reaches adulthood. According to Michelle Dennedy, founder of The Identity Project, such a victim could be denied credit; find their motor vehicle records tied to a criminal's name; be denied college loans; be unable to get an apartment or open a utility account; and have his or her medical records muddied with incorrect information.
While child identity theft is often committed by organized crime groups, the child's own family might also commit such fraud, according to Linda Foley, co-founder of the Identity Theft Resource Center, which provides assistance to ID theft victims. In one case, she said, the police knocked on the door of the victim's mother and asked to see her son, explaining there was a warrant for his arrest for failing to appear in court for speeding tickets. It wasn't the son who'd been getting the tickets, however. It was his father, using his son's Social Security number as his ID.
The child's reluctance, even upon reaching adulthood, to report the parents to the police adds to the difficulty of controlling child ID theft in such cases.
There's no easy way to detect the theft of a child's identity. For example, checking credit reports catches ID theft just one percent of the time. "Credit monitoring services are a good tool for parents, but not for kids," said Jay Foley, co-founder of the Identity Theft Resource Center.
But there are things parents can do to remain vigilant. One is to get online themselves. "You can't protect your kids' privacy online, and you can't protect your kids' finances online, unless you know how online works," said Alan Simpson, vice president of policy for Common Sense Media, a child advocacy group.
When someone asks for your child's Social Security number, ask questions before providing it, including why the number is needed, who will have access to it, and how it will be disposed of, according to Jay Foley.
Caution and awareness are the best preventatives, said IDAnalytics' Oscherwitz. "Be careful what you share, protect what you have, and monitor, monitor, monitor," he said.
For more on how to protect yourself and your family online, take a look at our Guide to Online Security.
—Donna L. Tapellini