Child identity theft occurs when someone gains access to a child's identifying information and uses it to get a driver's license or credit card. And it's not just strangers who are the perpetrators of this crime. Family members will sometimes use a child’s information to rebuild their credit or as part of a divorce/custody issue. Because years can go by before the theft is discovered, children are particularly vulnerable to having their identities stolen.
Pretty rotten, I know, and the problem appears to be on the rise. A recent press release from Equifax, a credit reporting company, notes the Federal Trade Commission fielded more than 19,000 complaints of child identity theft in 2011, compared to about 6,000 in 2003.
Growing up in Massachusetts, my social security number was my first driver's license number. People had it printed on their checks and gave it out freely; when I was 16 and working as a cashier, no one thought twice about giving me such precious information.
Nowadays, we guard our social security number pretty closely. The gold standard if a telemarketer asks for it is: decline, decline, decline. Ask if he or she can identify you by some other means, and if the answer is no, hang up. The same advice applies when you’re online: never use your social security number for a user ID or password.
Conducting business over the computer has become commonplace, however, and we often share identifying markers without a second thought. For example, when I was arranging travel for my family vacation a few years back, I set up an airline account for my then 5-year-old daughter to begin earning her own mileage points. Credit card offers arrived in her name, yet she was only 5!
Of course, offers like those, when they arrive via snail mail, can be a double-edged sword. If your child receives such a solicitation (or if you do, for that matter), and you're not interested in it, do not simply toss it unopened into the trash. A thief could dig through your garbage, apply in your child’s name, and ruin his or her credit.
That actually happened to my nephew, and the subsequent paperwork to clear up the mess was emotionally exhausting for his parents.
Instead, always open these mailers. If they contain a financial offer of any sort, put any personally identifying pages into a shredder and the rest of the paperwork into recycling.
If someone does manage to steal your child's identity, however, you may not realize it until your attempt to open a savings account for him or her is denied due to bad credit; or when she is 7 years old and receives a collection notice; or when he is 15 and applies for a learner’s permit, only to discover parking and speeding tickets connected with his social security number.
To avoid such an unwelcome surprise, check your child's credit report. Under Maryland law, you must contact each of the three credit reporting agencies individually to access it: Equifax: 1-800-685-1111; Experian: 1-888-397-3742; TransUnion: 1-800-680-7289. If no report exists, that’s good news.
No report should exist until your child applies for credit him- or herself.
The Identity Theft Resource Center, based in San Diego, is a great resource for learning how to prevent identity theft and take care of the resulting mess should it occur. On its website, www.idtheftcenter.org, there is information specifically about identity theft and children, plus many other great articles and recovery resources. The staff member with whom I spoke for this article said she was more than happy to help if I—or anyone else—ever needed it.
Closer to home, in March 2012, the Maryland General Assembly passed a bill allowing parents and guardians in the state to freeze their children's credit as a way to protect them from identity theft. The first such law of its kind in the nation, it took effect Jan. 1, 2013.
People can freeze their credit, without negatively affecting their scores, and then “thaw” it when applying for credit or refinancing a home, purchasing a car, interviewing for a job, or conducting any other business that requires short-term credit. Then they can simply refreeze it.
By the way, please do not confuse this article with legal advice, as I am not an attorney. If you or your child are victimized by identity theft, talking with an attorney would be a good idea. BC
For more information, go online to the website of the Maryland Office of the Attorney General, which has a page specifically on identity theft, at www.oag.state.md.us/idtheft/index.htm.
Annie Morrison is an independent advisor representative with and securities and advisory services offered through Commonwealth Financial Network, a Registered Investment Advisor, Member FINRA/SIPC. Zuma Financial Advisors in located in Reisterstown, MD. Email her, at email@example.com, or call (443) 468-3280.
The opinions expressed in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.