Your child's future looks bright.
You've planned well. You've praised them, shared in their successes and taught them the value of honesty and ethics; grades are good; teacher reports are good; social skills are good. You've protected them from evil elements of society and taught them stranger danger.
You have thought of everything, or have you? Did you think about their identity? Your child's credit history? "My child has a credit history?" you ask, slightly confused. Maybe.
In 2017, more than one million children were victims of identity fraud.
Cybercriminals compromise various data sources and steal the personal identifying information of millions of people every year. Children are included. Anything a thief can do with an adult's identifying information can be done with a child's information, including opening credit cards, obtaining mortgages and auto loans, opening lines of credit like utility accounts, applying for government benefits, and more.
From the thief's perspective, children make excellent targets. Their lives and their credit histories are blank slates -- no entries good or bad, and parents are unlikely to monitor or even check their child's identity or credit. The havoc a cybercriminal can wreak on your child's credit history probably won't be discovered for years, maybe even decades. By then, the cybercriminal has moved on and any evidence that might be gathered is gone.
In about half of child identity fraud cases, the child discovers the theft themselves when they apply for credit as an adult, only to discover they are not considered creditworthy -- years of bad debts, debt collections and credit charge-offs have taken their toll.
On the surface, correcting the problem seems like an easy thing to achieve. After all, any debt or loan attributable to a 9-year-old must be a mistake, right? However, 10 years later, one quarter of child identity fraud victims are still dealing with credit issues.
Watch for Warning Signs.
* Your child is denied government benefits because they are already being distributed to someone else.
* Your child receives preapproved credit offers.
* You receive an IRS or state tax authority's notice that you're no longer allowed to claim your child on your tax return because the child's Social Security number has already been filed.
Protect Your Child's Identity.
* Protect personally identifiable information, also known as PII. Tell your children to do the same in terms they can understand.
* Be aware of where and how you release your child's PII. Some school forms require PII. Ask if there is a policy to protect it.
* Ask how PII will be used. Is the PII released to third parties like booksellers, discount health insurance providers or others?
* On forms that request Social Security number, leave the field blank until you are told the field is required -- and ask what happens if you don't provide a number. Often, there are no consequences.
* Consider freezing your child's credit. A credit freeze makes it much more difficult for cybercriminals to exploit PII.
* Ask the three major credit reporting companies if your child has a credit file.
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