Victim of ID theft?
A new federal law going into effect in September will make it easier for families to combat a growing problem of identity fraud of minors, allowing them to make inquiries about credit files in their child’s name and freeze a file at no cost.
Data-security experts say children are increasingly targeted by thieves who steal their Social Security numbers to create fake or “synthetic” identities, then open credit cards, take out loans or apply for public assistance. One credit-reporting company, Experian, estimates such identity theft will affect one in four children before they become an adult.
The measure on children’s credit is part of a broader banking law that also allowed unlimited, free credit freezes for adults, a response to a massive data breach at Equifax Inc. last September.
Steps for parents
- Go to identitytheft.gov/Steps, scroll down and click on the Child Identity Theft section, under Special Forms of Identity Theft.
- That section has instructions on how to find out if your child has a credit report. Most young children shouldn’t have credit files.
- The webpage includes contact information for credit agencies and how to freeze credit.
- Some experts recommend parents create a credit file for their children and freeze it, because the system is built on the idea that the first person to create a file is that person.
- Keep the record of freezes in a safe place, so the child or a guardian can find it when needed.
Criminals see the clean credit history of children as particularly attractive, in part because parents rarely check on them. That often allows theft to go on unnoticed for years, until the victims reach college age and start applying for credit cards and student loans. Also, a 2011 change in how the government assigns Social Security numbers to babies and new immigrants made it easier to steal numbers without being discovered, experts said. Young children don’t have credit files unless parents or guardians have opened them — or someone committing fraud did so.
Last year, the Federal Trade Commission received 14,000 complaints involving identity theft targeting people 19 and younger, about 3.7% of complaints for all age groups. But experts say those numbers may understate the problem because parents are often unaware of children being targeted, and don’t report.
“We have found children are increasingly victims of identity theft,” said Suzanne Barber, director of the Center for Identity at the University of Texas at Austin. “If I were going to patchwork an identity, whose would I want to use? I’d probably use the identity that is checked least often.”
Al Pascual, an analyst specializing in fraud and security at Javelin Strategy & Research, said a child’s personal information is more valuable on the dark web than an adult’s, with a full set of personal information known as “fullz—name, date of birth, address and Social Security number—going for 10 times, 20 times more” than an adult file, which typically fetches $5 per person.
ID Analytics, an identity-fraud prevention unit of Symantec Corp., estimates 2.2% — or one in every 50 — of credit applications filed under newly issued Social Security numbers carried fake identities last year, up from 1.2% in 2013. Many of those numbers are believed to belong to young children.
Once a child’s personal information is stolen, cleaning up the aftermath can be difficult.
Jill Carlon, a Peoria, Ariz., mother of three, said she spent seven years fixing her daughter’s credit file after receiving a call in 2011 about a new J.C. Penney Co. Inc. credit card opened using her then 7-year-old daughter’s Social Security number. More accounts followed, including at Dillards Inc., Macy’s Inc. and Fry’s Electronics Inc. Then collection notices came from a local hotel.
“As a mother, I am supposed to be there to protect her and do everything I can,” said Ms. Carlon, a 46-year-old nurse. “It was out of my control.”
Ms. Carlon tried to shut down the accounts, but was turned away because the name on the accounts didn’t match her daughter, Avery.
She called banks, credit-reporting companies, the police and lawyers, then turned to local council members and U.S. senators for help. Ms. Carlon said the effort required stressful trips with her daughter to court and Social Security offices. The Carlons changed their daughter’s first and middle names in an attempt to get her a new Social Security number. The issue was finally resolved earlier this year when a new Social Security number was issued to Avery just before she started high school.
Once the provision in the new law goes into effect on Sep. 21, parents should contact the three main credit-reporting companies — Experian, Equifax and TransUnion — to check on their children’s credit files, experts say. Most young children shouldn’t have credit files. If that is confirmed, parents should either check back with the companies on a regular basis, or create a new file and freeze it, the option some experts recommend.
The FTC has a new webpage on its IdentityTheft.gov website with a detailed guide on how to freeze credit files for adults and children. The page includes the contact information for the credit agencies and what to say or write to freeze credit.
Ken Meiser, chief compliance officer at ID Analytics, recommends parents create a credit file for their children, because the credit-reporting system is built on the idea the first person to claim an identity is that person. “It makes sense for a parent to make sure that they have created that file and protected it,” Mr. Meiser said.