Identity theft involving children is unfortunately becoming more common. According to a Javelin Strategy & Research study, over 1 million children were victims of identity theft in 2021.
Child identity theft occurs when someone illegally accesses your child‘s personal information and uses it to commit fraud. This crime often goes undetected for years since parents don‘t expect their young kids to have a credit history or file tax returns. By the time it‘s discovered, it can be a complex mess to unwind.
The impact on victims can be severe, from being denied student loans and health benefits to having fraudulent crimes committed under their identity. The average family loses over $1000 fixing these issues.
As a parent, you undoubtedly want to protect your children from identity theft. In this guide, we‘ll cover everything you need to know, including:
- How child identity theft happens
- Warning signs that your child is a victim
- Steps to take if your child‘s identity is stolen
- Tips to help prevent child identity theft
- FAQs on this issue
Let‘s start by understanding the different ways child identity theft occurs.
How does child identity theft happen?
Identity thieves use a variety of tricks to steal kids‘ sensitive personal information, including:
Data breaches occur when hackers illegally access private data stored by companies or organizations. Depending on what information was accessed, data breaches can expose children‘s names, birthdates, home addresses, and social security numbers.
Criminals may also use phishing scams pretending to be reputable companies to trick parents into revealing information.
Shockingly, trusted family members or friends commit a significant portion of child identity theft. Relatives may have easy access to sensitive documents like social security cards and use the information to open fraudulent accounts.
Children‘s SSNs are especially valuable to scammers because they likely don‘t have existing credit reports. Criminals can pair the SSN with a fake identity to apply for loans, government benefits, and more.
Unfortunately, some organizations like schools and medical offices still request children‘s SSNs even when not strictly required. Foster children are especially at risk since their information passes through many hands.
How to protect children from identity theft
The best defense against child identity theft is limiting how much personal data your family shares, both online and offline. Here are some tips:
Limit access to your child‘s Social Security number
Don‘t share your child‘s SSN unless absolutely necessary. If a school or doctor requests it, ask if alternatives like using just the last 4 digits would suffice.
Protect and shred documents containing personal information
Keep sensitive documents securely filed or locked up, and shred them before disposal.
Educate your kids about identity theft
Have open conversations about online safety, being wary of sharing personal details publicly, and using privacy settings on social media. Set rules about information sharing and monitor their internet use.
Know the school‘s privacy and security practices
Ask how your school handles sensitive student data and verify they use secure systems with proper encryption and access controls.
Consider using a credit monitoring service
Credit monitoring can notify you of any accounts opened in your child‘s name. Look for services that allow you to add child identity monitoring to your plan.
Signs of child identity theft
Watch for these red flags that indicate your child may be an identity theft victim:
- You get calls from debt collectors about accounts opened in your child‘s name.
- Your child receives pre-approved credit card offers in the mail.
- Your child‘s social media accounts start posting unusual spam content.
- You receive an IRS letter about taxes owed under your child‘s SSN.
- Your child gets denied government benefits due to bad credit history.
- Your child has an existing credit report with unknown accounts or activity.
How to respond to child identity theft
If you suspect your child is the victim of identity theft, here are the steps to take:
Report and close fraudulent accounts
Contact companies where the fraud occurred and their fraud departments. Request fraudulent accounts be closed and charges reversed.
Report it to the FTC
File a report about the identity theft at IdentityTheft.gov and save the recovery plan.
Freeze your child‘s credit
Request credit bureaus freeze your child‘s credit report to prevent new accounts from being opened.
Contact your local law enforcement
File a police report about the identity theft, which many creditors require before clearing damages.
Monitor accounts and credit reports
Ongoing monitoring of your child‘s credit reports and existing accounts for further suspicious activity is wise. Sign up for credit monitoring that includes child identity protection features.
FAQs about Child Identity Theft
How often does child identity theft happen?
According to 2021 statistics from Javelin Strategy and Research, over 1 million children were victims of identity theft. On average, it takes 4 hours longer to resolve child identity theft cases compared to regular identity theft cases. The average family lost around $1000 fixing the issues caused by child identity theft.
What are the consequences of child identity theft?
Child identity theft can severely impact victims well into adulthood. They may be denied student loans, jobs, health benefits, or car loans due to damaged credit history from the thief‘s actions. In some cases, crimes committed under the child‘s stolen identity can wrongly become part of their criminal record.
How do you know if your child‘s identity has been stolen?
Watch for any unexplained credit card offers, collection calls, denied government benefits, or social media account hacks in your child‘s name. Also consider periodically checking your child‘s credit report for any unknown accounts or credit history.
The Bottom Line
Child identity theft is a rapidly growing form of identity fraud. While monitoring your child‘s online presence and limiting personal data sharing is wise, also be aware of offline risks from family members or breaches of sensitive documents. If you see any warning signs of possible theft, take action immediately by reporting it and freezing credit reports. Ongoing credit monitoring including child identity protection features can also alert you of issues early.
By understanding how child ID theft happens, being proactive about prevention, and knowing how to respond if your child is victimized, you can help safeguard their financial future and save hours of effort unwinding issues. Protecting kids from identity theft does require some extra vigilance, but it‘s well worth it as they grow into young adults.