We’ve been talking quite a bit lately on this blog and our Facebook page about the impact identity theft is having on your credit. But, did you know that identity theft can ruin your child’s future? Remember how we spoke about the importance of regularly checking your credit report to find any activities that evidence identity theft? You need to do this for your children too.
Child Identity Theft is on the Rise
A new report released by Javelin Strategy & Research this week says that more than 1 million children living in the United States were impacted by identity theft in 2017. Of this, 66% were children under the age of seven. Overall, according to their research, approximately $2.6 billion in losses last year is attributed to identity theft involving children. For parents, identity theft cost them more than $540 million in out-of-pocket costs.
Stealing children’s identity is much more appealing because the perpetrators know it will take some time before it is discovered. In the meantime, with your child’s personal data, they can create new identities and cause quite a bit of havoc.
How do you protect your child’s future and your financial health?
Most Identity Theft Comes at the Hands of Those You Know
The Javelin Strategy & Research report says that roughly 60% of identity theft involving children is perpetrated by people you know. This makes the identity theft more difficult to discover because family members, for instance, have the ability to intercept notifications and can manipulate the child’s accounts.
The next area of vulnerability is digital private and public records. The fact that schools, medical offices, and government agencies have digitized all of our personal data opens another door for identity theft, this time at the hands of cybercriminals. According to the study, 11% of identity theft was due to digitized records.
Identity theft involving children can continue for years before it is discovered. Claiming that your child could not possibly have these charges because he or she is a minor doesn’t work. Cleaning up the errors is just as difficult as it is to clear up the errors on your credit report.
While you may be checking your credit reports three times a year, you are probably not thinking about checking the credit report of your children. By the time the identity theft is discovered, your child’s financial future can already be ruined. If the identity theft comes at the hand of a family member or close friend, they most likely also used your address, phone number, and other personal data. This makes it more challenging to dispute the fraudulent activity.
- You go to sign up your child for benefits and are told that he or she is already enrolled.
- You receive a notice from the IRS claiming unpaid taxes.
- You begin to receive calls from collection agents demanding that your child come current on outstanding debt.
In any of these things happen, do not assume there has been some mishap with the computer or a paperwork error. Take affirmative action right away and assume your child’s identity has been stolen.
How to Keep Your Child Safe from Identity Theft
- Not every office needs your child’s social security number. If you are asked to provide it, take a minute to ask why and contemplate if it is really necessary. For instance, sports clubs or after-school programs do not require your child’s social security number. In the meantime, safeguard all papers that contain your child’s social security number.
- If your children are old enough to be on the internet, be sure to talk to them about identity theft. Teach them to refuse any request to divulge their social security number or any other personal information. If there is a legitimate reason to do so, ask them to involve you in the entire process. If they are teens or pre-teens, you can teach them how to spot scams and phishing attacks.
- Check your child’s credit report as frequently as you check yours. Remember, we suggested that you order your annual free report from each of the three credit reporting agencies. This means that three times a year, you are checking your credit report. Do the same for your child(ren).
- If you see any activity that is suspicious, report it right away.
- Freeze your child’s credit report. Any attempt to secure financing will require a check of your child’s credit report. They don’t need a credit card right now, so there is no harm in freezing their credit report until they get older.