Wednesday, May 4, 2011

The Growing Threat of Child ID Theft: What it is, how it's discovered, and clearing the record, after the crime.

Stopping Identity Theft: 10 Easy Steps to SecurityAs most recent tax filers know claiming a child deduction on your income tax requires you to apply for and have a social security number for each child you are claiming. This has led to a new form of identity theft; Child ID theft. Given that a child may not have a "credit check" done for 18 to 25 years the opportunity for identity thieves to go undetected is multiplied significantly.

As recently reported by Bob Sullivan at The Redtape Chronicles on msnbc.com, a Carnegie Mellon University report published by Richard Power, a distinguished fellow at the school's CyLab research center, revealed that child ID theft is much more pervasive than previously imagined by most people who are aware of this type of crime.


Using data supplied by identity monitoring company Debix, Power examined 40,000 children's profiles and found more than 10 percent had identities that were adversely impacted in one way or another. Mr. Sullivan noted that among the 4,311 children found to have tainted identity records, 300 were under 5 years old. Nearly 1,800 cases involved utility service records, such as bogus electricity service accounts. There were also 500 kids' names attached to mortgages or foreclosures and 415 of the kids had driver's licenses.

Among the victims described in the report there was a 16-year-old girl in Arizona with 33 credit accounts linked to her name, including three mortgages; a college student with $300,000 in debt that was the result of the transposition of numbers; a college student from Texas who lost an internship because her background check classified her as "unemployable"; and a 30-year-old woman in Arizona who recently tried to buy a home, but was turned down because her bank told her that she had a recent foreclosure on her record. This woman's identity was compromised when she was only twelve years old and, as evidenced by her recent real estate woes, she is still haunted by the identity thief who became her imposter years ago.

Though the study was not strictly scientific, as the data sample was not necessarily representative of the public as a whole, the data is consistent with other research that suggests that criminals often use randomly selected Social Security numbers to obtain employment or credit, which puts children at equal risk as adults. Furthermore, as the researcher pointed out, "(Children) make perfect targets because they have no records and don't discover the crime for years," In fact, the deliberate theft, or inadvertent error, that affects the child's ID usually isn't found until the child applies for college financial aid, a car loan, or attempts to obtain employment. 

What is Child ID theft? How does it happen, and what can you do- as a parent or as a victim - when this type of problem hits home?

As pointed out in an on-line fact sheet ("A Guide for Parents - Child Identity Theft Indicators") distributed by the Identity Theft Resource Center (ITRC), child identity theft occurs when a child's identity is used by another person for the imposter's personal gain. The perpetrator may be a family member or someone known by the family. It could also be a stranger who purposely targets children because of the lengthy time between the theft of the information and the discovery of the crime.Criminal identity theft occurs when a person "borrows" the information of the minor to get a driver's license or uses the child's identity when caught in a criminal act. Identity assumption is when an identity thief uses an identity for financial, criminal, and governmental purposes.
Parents or relatives of child ID theft victims are usually the first to notice something is not quite right, and discovery often comes:
  • When attempting to open a savings account or college fund for the child. In this scenario, an unoffending parent discovers that there is already an account with that SSN or that the new account is denied due to a bad check record
  • When numerous credit cards, checks, pre-approved credit card offers, bills or bank statements are received in the name of the child
  • When collection agencies call or send letters about accounts not opened by the child
  • When a teen is denied the right to get a driver's license because another person has a license with that SSN as ID. The imposter may even have accumulated tickets or citations in the child's name
  • When law enforcement comes to the door with a warrant for an arrest of the child.
  • And when, in cases where one parent is the culprit, the other one goes through papers during a divorce or while straightening up the house.
Adults, who were unknowingly victimized when they were minors, typically find out in the same manner as adult victims of identity theft when they:
  • Are denied credit, a mortgage, or a loan for a vehicle or college tuition
  • Are unable to open a bank or checking account
  • Receive collection notices in the mail or by telephone
  • Are denied tenancy, utility or phone service
  • Are denied driver's license renewal
  • Are discharged from a job or continually and unexplainably denied employment
  • Have been receiving bills or credit cards they never requested, perhaps for years
  • Are arrested for an activity they never committed
  • Are denied SSI or welfare services.
When it becomes apparent that a child has become a victim of identity theft, parents and guardians often seek to clear the child's records, and to do this, will have to act on the child's behalf. Reportedly, most law enforcement agencies hesitate to get involved, believing that this type of case falls into the jurisdiction of "family law" - which it does not. ITRC recommends the following remedial actions:
  • Order a credit report: Follow the procedures on ITRC Fact Sheet 120A - To Order a Credit Report for a Child, report the crime to the police, and contact the credit issuers to clear your child's records (see ITRC Letter Form 120 - Request a Child's Credit Report). Even if there is no credit report, there is a possibility that something might show up later. Check reports again when the child is 16
  • Obtain a copy of the child's birth certificate, as it will be required for most requests
  • Refer to ITRC Fact Sheet 106 - Organizing Your Identity Theft Case
  • For accounts that have gone to collection, use ITRC Fact Sheet 116 - Collection Agencies and Identity Theft, designed to help you in that situation
  • Point out that the child is a minor and that by law is not permitted to enter into a contract.
  • Ask to have all accounts, application inquiries and collection notices removed immediately from your child's credit report. You can do this via the credit issuer or through a dispute process with the credit reporting agencies (ITRC Letter Form 100-3). ITRC recommends that you make the request of both groups. In the end, the credit issuer is the final decision maker as to whether to accept the claim of fraud or not.
  • Request copies of all application and transaction records (ITRC Letter Form 100-1). Make copies and provide those to the police investigating the case. They may help you discover how this crime occurred.
  • In the area of criminal identity theft, the ITRC Fact Sheet 110 - Criminal Identity Theft specifically written for that purpose.
For additional information on identity theft in general, and child ID theft in particular, you may wish to visit the website of the Identity Theft Resource Center®, a nonprofit, nationally respected organization dedicated exclusively to the understanding and prevention of identity theft. The ITRC provides victim and consumer support as well as public education. The ITRC also advises governmental agencies, legislators, law enforcement, and businesses about the evolving and growing problem of identity theft.

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