No child is too young for identity theft; it happens to kids 51 times more often than adults. Image: Flickr/Herckie's photostream CC-BY-SA

Child identity theft is becoming all the rage. New research shows that identity thieves are focusing increasingly on kids because parents don’t pay attention, and the theft can go undetected for years. But when the victim tries to get a job or credit as a teen or young adult, the damage done becomes evident.

The scourge of child identity theft

Thousands of children and their families are being victimized by identity theft and thousands more are at risk, according to a report by Carnegie Mellon University’s CyLab cybersecurity research center. The report examined the identity protection scans of 42,232 children conducted in 2009-10 by the Debix AllClear ID Protection Network after parents were notified their children’s IDs may have been compromised. The Debix AllClear ID data showed 4,311 of the children, a little more than 10 percent, had their Social Security numbers in use by identity thieves. That’s a child identity theft rate 51 times higher than the 0.2 percent of U.S. adults targeted by identity thieves, based on 663 attacks against 347,362 adults listed in Debix AllClear ID. The youngest child identity theft victim was five months old. A 17-year old girl from Arizona discovered she was $725,000 in debt with with 42 open accounts including mortgages, car loans and credit cards. Her Social Security number was linked to eight suspects. A 14-year-old boy from Kentucky had a credit report going back 10 years listing a mortgage foreclosure.

Victims of friendly fraud

Child identity theft appears to be coming to a head after the seeds were planted in early 1980s. Back then the Internal Revenue Service directed the Social Security Administration to give all children Social Security numbers. Most children become  identity theft victims at the hands of parents, family members or close friends who have access to their Social Security numbers. According to Javelin Strategy & Research, “friendly fraud” made up 30 percent of child identity theft cases in 2010. Because credit checks don’t verify age, identity thieves can freely take out loans, get credit cards and create accounts. The non-profit Identity Theft Resource Center recently helped a young man from Florida who failed a background check to become a police offer because his estranged father had stolen his identity years earlier and destroyed his credit.

How to deal with child identity theft

The Identity Theft Resource Center recommends teaching children about the importance of privacy and the danger of sharing personal information online. All personal information, including Social Security numbers and birth certificates, should be kept in a secure place. If mail arrives in the child’s name, that’s a warning sign that a credit file has been opened. Parents should contact all three credit major bureaus immediately and ask for a credit report. If no credit report exists, the child is likely in the clear. If a credit report surfaces, a security alert must be filed with all the credit bureaus including Equifax, Experian and TransUnion. File a police report using the credit reports as evidence. A police report listing the fraudulent accounts obligates the credit bureaus to remove them from the credit report within 30 days.

Sources

Forbes

Atlanta Journal Constitution

Wallet Pop

Identity theft is on the rise. (Photo: TheTruthAbout/Flickr/CC BY-SA)

Even in the light of all the warnings and mass publicity regarding scam protection, scamming has continued to be a major problem today. The more light and publicity that shines on these illegal acts in order to protect the public, the more clever these scammers get in their schemes. If you want to stay out of their clutches, be aware and do not take risks with your money and personal information.

Be careful who you trust

Recently, I received an e-mail from a friend saying she had gone on a trip to England. She had either misplaced her purse or had it stolen and was in need of funds to help her return to the United States. It all appeared very innocent, except that she couldn’t be reached by phone. I was just about to take out a bad credit loan when I decided to call her at home. To my shock and disbelief, she was there and had never gone to England! So you can see why it is very important you take precautions before making a last-minute jump.

Safeguard your personal information

Here’s another example of scamming, one I had experienced during the process of applying for jobs and rentals. One of the rentals sent back a link along with photos of a really nice home at a very reasonable price. However, I had to complete a credit check before they could provide any more details on the house. Basically, according to the company, it was used to determine whether I had any past evictions. Seems innocent enough, right? Wrong! This is actually a huge red flag to look out for.

On another occasion, the so-called company of an available job position I had inquired about had sent me a bunch of forms to fill out, including a I-9 form (requires social security number) and a direct deposit form (they only pay that way). There was even a form that required a passport size photo of myself. Be aware that these are red flag signs to look out for, as well.

Build awareness

These schemes, among many others, may still be working for many scammers, so get the word out and build awareness. Thankfully, there are still many reputable companies out that strive to make life easier, providing payday loans and other types of short term loans to help with unexpected money problems.

Identity thieves, who victimized nearly 11 million credit card holders in 2009, are targeting more job seekers and children. Image: Thinkstock

Identity theft is one of the fastest growing crimes in America. Nearly 11 million credit card holders each year are victims of identity theft. While everyone is vulnerable, trends show that identity thieves are increasingly targeting children and job seekers.

Ingenious identity theft scams

Victims of identity theft in the U.S. lost an average of $4,840 in 2009, according to Javelin Strategy and Research. New forms of identity theft are constantly emerging. Claudia Buck at the Sacramento Bee reports that three men were busted in Los Angeles last week for using electronic gadgets to scan credit card numbers at numerous gas station pumps. Buck writes that the state government in California has been warning about phony e-mails telling taxpayers their electronic tax payments did not go through. Identity theft is on the rise in every state, and thieves spend a lot of energy to coming up with the next scam.

Employers don’t need personal information

In the moribund job market, identity thieves see an opportunity to kick people while they’re down. Alison Doyat at About.com writes that identity thieves are adept at creating websites that look like  legitimate companies or agencies. An obvious red flag is raised if an online entity asks for personal data other than contact information at the beginning of the application process. Other red flags include ads promoting pay that seems too high for the job or offering payment in cash. Job seekers posting resumes at online career sites should never include Social Security numbers, birth dates or drivers license numbers.

Things parents should know

Identity thieves make big money exploiting children. Modern Mom reports that because children have a clean credit history, they’re lucrative targets. Children or parents commonly don’t discover they have been victimized until years later, when the kid applies for a credit card. Banks and the Social Security Administration do not give out birth dates, so credit reporting firms can’t verify age. Identity thieves often open lines of credit with a child’s identity when a parent loses a wallet or purse holding personal data like a child’s Social Security card. The easiest way to see if a child’s identity has been stolen is to request a credit report. No credit report on file means they’re safe … for the time being.