The Federal Trade Commission and the Justice Department are stepping up actions to combat child identity theft. The agencies are sponsoring a public forum on the topic on July 12, 2011. Called Stolen Futures, it will also be webcast for viewing online. The forum promises advice for parents and victims on how to prevent the crime and how to fix child identity theft problems.
Child identity theft is a growing problem nationwide. It often goes undetected for years, causing big problems as children approach adulthood. It's surprising but in many cases it's a relative with poor credit who steals the child's identity. In other cases unrelated, professional identity thieves obtain kid's identities to feed fraudulent credit-fixing schemes. In any case it's something to guard against.
Identity theft, unfortunately, isn't an uncommon problem, and chances are that you, or someone you know, have had to deal with some form of identity theft. It can range from someone charging your credit card without your knowledge, or using your personal information to open up a fake account.
When you find out you're a victim of identity theft it can be a scary, frustrating and annoying experience having to deal with the process of reclaiming your money as well as your credit score. It can tax your time and resources. You probably, at least in your mind, curse out the person who stole your information and got you into this mess.
Now, imagine if the person who stole your card or used your information to open up a credit card is a relative. Your credit is jeopardized, you'll now have a hard time applying for a mortgage and getting new credit cards because a parent, or other member of your family, messed up your credit.
Many children have become victims of identity theft, and the thief is their own mother or father!
Why Would a Parent Destroy Their Child's Credit?
It may be unintentional and starts with an innocent plan to repay back the amount "borrowed" as soon as possible. Parents or relatives can easily become thieves and perform identity theft because they have easy access to their child's personal information needed to open up a card.
If their own credit isn't great, and they need to take a loan, using a child's social security number may sound like a good way to get that loan. The child, after all, has a clean record; therefore the parent can get better financial terms. However, the problem is that using someone else's information for your financial needs is illegal - it is identity fraud.
What ends up happening is that perhaps the loan was forgotten about, and lays dormant collecting interest. When the child reaches adulthood and wants to take out a loan or open up a credit card, all of a sudden, he sees a long, and often blemished, credit history.
They'll have a difficult time getting a loan, or prevented from leasing a car, renting an apartment or even paying for school. Some young adults end up filing bankruptcy on a debt that they had no knowledge of or control over.
Unfortunately, child identity theft is on the rise and the Federal Trade Commission warns that about a quarter of identity theft complaints come from young adults. Furthermore, this problem is likely only to rise; it's relatively easy (no pun intended) for a parent, or anyone, to take out a loan on someone's name, or open up a fake account.
Don't Credit Agencies Verify an Applicant's Age?
Most credit checks don't verify the age of an applicant. That means a person can use another's social security number and apply for various loans or cards. When the child becomes old enough to take out a loan or a credit card, he sees what should be a clean past, is not.
Child identity theft ends up becoming not only a minor banking inconvenience, but an emotional problem. These young adults don't know how to react: On one hand they find out that their finances are a mess for reasons out of their control, but on the other hand, taking action means that they may need to take their own relatives to court. These forms of identity theft result with a feeling of betrayal and helplessness. Taking action and reporting this to the police may result in feelings of guilt and additional problems at home.
If you suspect that your parents or other relatives may have used your identity, seek help as soon as possible. It's best to contact agencies and people knowledgeable with child identity theft issues who can help you with the next steps. The ID Theft Center is a good place to start.
- As a parent, check your child's credit files with each credit bureau; children under 18 shouldn't have a credit file
- Once a year, for free, an adult can order a credit report from Experian, TransUnion and Equifax
- If the credit card report looks suspicious, contact the police and all of the companies and collection agencies listed on the report that may be involved in the fraud
- Notify the credit companies themselves and put a freeze on the account
Children need social security numbers for many reasons, but they shouldn't be misused. Identity theft is difficult enough for adults to deal with, and young adults shouldn't have to learn the hard way that fraud is all around them, even from their own relatives.
Questions for Your Attorney
- What should I do if I receive information from a business such as a bank that my child's account and personal information may have been stolen? How long do I need to monitor his credit?
- Are free credit reports available for children?
- Do all children have credit profiles if they have a social security number, and can I freeze their profile?