Have you checked your child's credit report lately? You may want to. More than 1 million children had their identities stolen in 2017, according to new research.
Worse, because a child's credit report is a "blank slate," crooks can use a kid's Social Security number to create an entirely new identity. By the time the child grows up and finds out he or she has been victimized, the crook has done so much damage that it's extremely difficult to correct, said Al Pascual, head of fraud and security for Javelin Strategy and Research, which conducted the study released today.
"With every new account that the criminal opens, the criminal adds credibility to his claim to that [victimized child's] Social Security number and the credit report that goes along with it," said Pascual. "That can make it extremely difficult for the victim to fix the record."
The theft is likely to go unnoticed for years. The study, which was sponsored by Identity Guard, found 66 percent of child ID theft victims are under the age of 8 -- more than 10 years away from being able to sign a legal contract.
Moreover, 60 percent of child victims know the crook. Indeed, 22 percent of these frauds are perpetrated by a parent or a stepparent. Other relatives, including uncles, cousins and siblings, account for 10 percent of the frauds. The most common perpetrators are "family friends."
Since the child's guardians may have a personal relationship with the crook, these frauds frequently aren't reported to law enforcement, Pascual said. "If it's Uncle Sal, the parents might be reluctant to report him to the police," he noted.
Kids who are bullied are far more likely to be victims of ID theft, the report adds. This may be because they're unprepared to protect themselves in person or online.
Cyberbullying is less prevalent than in-person bullying, the report notes. But it's more closely correlated with childhood ID theft. Minors who are bullied online are nine times more likely to be victimized than those who aren't. Those bullied in person, however, lose the most money. The average fraud amount for child victims who were bullied in person is an astounding $4,075 -- four times the overall average, according to the report.
What can you do to protect your child from ID theft?
Check your child's credit report to see if any items are associated with his or her Social Security number. None should be.
Freeze the child's report until he or she is old enough to apply for credit.
Secure your child's Social Security number, keeping tax forms locked away and statements for, say, college accounts in secured files.
Report any inaccuracies on the child's file immediately and file a police report, if necessary. It's understandable that you may not want to recognize the larcenous nature of your new romantic partner, but he or she could be ruining your child's future chance at buying a house or car, or getting a credit card.
Be vigilant. The earlier fraud is detected, the easier it is to solve, Pascual said. Indeed, for the vast majority of child victims, proving that they didn't take out the loan that appears on their credit report is as easy as showing the credit bureau the child's birth certificate. Remember, if that fraud isn't discovered until the child is older, fixing the record can be a nightmare.
"We have done studies on adult identity theft for 15 years, but this is a very different kind of crime," said Pascual. "It's much more difficult to reconcile."