By Carrie Kerskie, Director of the Identity Fraud Institute at Hodges University
Children are a favorite target of identity thieves. By using a child’s identity, a thief can typically go undetected for up to 18 years. Most victims do not discover the identity theft until they apply for college or attempt to obtain their first credit card, both of which do not occur until the child is approaching or has approached his/her 18th birthday. So, what can you do to protect your children from becoming the next identity theft statistics?
Preventing all types of child-related identity theft is impossible. However, there are steps you can take to greatly reduce the risk of credit-related identity theft.
The Florida Keeping I.D. Safe (KIDS) Act of 2014 allows parents or legal guardians to establish a credit record for their child and then freeze it. The passage of this law was crucial to protect our children from credit-related identity theft. Here is why:
A credit freeze prevents any new creditors from ever seeing the credit report. If a potential creditor cannot see the credit report to determine credit worthiness, the credit account will not be established. A credit freeze is your best defense against new (credit) account fraud. However, you can only place a credit freeze on an established credit record. Minors typically do not have a credit record; therefore, a credit freeze would not be possible. In other words, how can you freeze something that does not exist?
The KIDS Act solved this problem by permitting a credit record to be established without having to first apply for credit. Once the credit report has been established, it can then be frozen.
The fee to place a credit freeze on a minor’s credit record is $10 per credit bureau. This fee is waived if the minor is already a victim of identity theft. To establish a freeze, the parent or guardian must contact each credit bureau directly. The request must be submitted in writing along with required supporting documentation to validate the identity of the parent or guardian initiating the request. Additional information along with instructions and contact information can be found at the Florida Department of Agriculture and Consumer Services website http://www.freshfromflorida.com/Consumer-Resources/Consumer-Protection/Protect-Your-Child-s-Identity.
Here are a few more tips to reduce the risk of child identity theft:
- Protect your child’s social security number. Before providing your child’s social security number (SSN), ask if it is necessary and how it will be protected. Ask if you can use another identifier or the last four digits of the social security number.
- Paper and electronic records with your child’s sensitive information should be kept in a secure location.
- Shred all documents showing your child’s sensitive information prior to throwing it away.
- Talk with your children about identity theft. Discuss what information should and should not be shared on the internet and why.
You should also pay attention to warning signs of child identity theft. These include:
- Collection calls or bills for products or services not received
- A written notice from the IRS saying your child owes income taxes or that your child’s social security number was used on another tax return
- Credit card offers or statements for your child
- An Explanation of Benefits statement from your health insurance carrier for an unknown charge or service
- Data breach notification letter
- Your child is denied government benefits because the benefits are being paid to another account
- Your child has a credit report prior to you activating the record
If you observe any of these warning signs, please do not disregard them as an error. You must take immediate action by contacting the involved organization and requesting additional information.
It should be noted if an identity thief were to use your child’s SSN as part of a synthetic ID, the credit freeze may not stop it. A synthetic ID is when an identity is created using information from multiple people. It could be the SSN of a child, the name of another person and a false date of birth. Due to how credit reporting agencies manage credit, a child could still become a victim. Credit reporting agencies do not cross-reference the information with the Social Security Administration. Further, one could have a credit report and a different credit file. This is not mentioned to discourage you from placing a credit freeze. It is meant to encourage you to keep your guard up and monitor for warning signs.