Fight Child Identity Theft with 5 Key Steps

A big part of your job as a parent will be to protect your newborn from everything around him or her. But what about those things you can’t see — like criminals trying to steal your child’s identity? Learn more about how child identity theft happens and what you can do to battle this growing problem.

How child identity theft happens

This disturbing twist on identity theft usually involves thieves who are mainly interested in stealing a child's Social Security number, which can then be:

• Sold to the highest bidder.
• Used to apply for things like government benefits, open bank and credit card accounts, apply for a loan, receive medical treatment or rent a place to live.
• Crafted to create a new identity.

What makes a child such a desirable target for identity thieves?

Since children don’t usually apply for a credit card, a loan, etc., they have a “clean slate” of credit history thieves can take advantage of. In a typical scenario, because parents really have no reason to check their child’s credit (as they have none yet!), the theft is usually not discovered until the child turns 18. That delay may leave the child with a slew of financial and legal issues to resolve, making it difficult to apply for financial aid for school, get a loan or establish credit.

Hitting close to home

A common misconception about child identity theft is that strangers — a scammer calling from across the country or a shadowy figure huddled in front of a computer screen — are usually behind the crime.

But in many cases it’s actually a relative or close acquaintance who has frequent access to your home, computer or mail and uses that opportunity to steal the child’s information. And sadly, there are parents who commit this crime against their children to erase a bad credit history or obtain a new identity.

How to protect against child identity theft

You can help protect your child from identity theft by doing the following five things:

1. Look for “red flag” mail that comes with your child’s name on it. If your young child starts receiving pre-approved credit card offers or correspondence from debt collectors you may want to do a credit check for them.
2. Find a safe location for all paper and electronic records that show your child’s personal information – and shred any documents with personally identifiable information (PII) instead of just throwing them out.
3. Don’t share your child’s Social Security number unless you know and trust the other party. Even if it’s for schools, sports or other activities, always ask why it’s necessary and how it will be protected.
4. Familiarize yourself with laws that protect your children, such as the federal Family Educational Rights and Privacy Act (FERPA), which protects the privacy of student records.
5. Periodically contact one of the three credit reporting companies (Equifax®, Experian® and TransUnion®) on your child’s behalf to determine if a credit file has been established in his or her name. Even if it is still intact, check again in a year or so.

Putting a credit freeze on your child’s credit report is another option. But the irony is that you can’t put a freeze on a credit report if the child doesn’t have one yet. That’s why several states now require credit agencies to help parents and guardians create a new credit report for a minor child for the express purpose of immediately freezing it.