Protect Your Child From Identity Theft
September 28, 2018 - Unfortunately, I need to share some bad news for parents of minor children: Could someone be using your child’s Social Security Number (SSN) to take out loans, file false tax returns or otherwise sully your angel’s pristine identity?
As distasteful as it may be, child identity theft is on the rise. Citing a 2018 Child Fraud Prevention Study by Javelin Strategy & Research, NBC News reported that more than 1 million children had their identities stolen in 2017; two-thirds were under the age of eight. Worse, the data suggests children are more than twice as likely to become fraud victims after the initial breach (39% vs. 19% for adults). Resulting losses were $2.67 billion in 2017, with families paying $540 million out of pocket.
Sobering stats, so why are you just now hearing them? It can take years to see the damage – potentially not until your child is nearing adulthood and first applying for credit.
There are some earlier warning signs. If your kid starts receiving credit card offers, IRS notices, or calls from collection agencies, don’t laugh them off as “cute.” Your child’s identity has probably been stolen.
If you suspect it has, request a credit report from the three major credit agencies: Equifax, Experian and Transunion. Your child should NOT have a report. If they do, there’s more work to do. Ask each agency to remove all accounts, account inquiries, and collection notices from any file associated with your child’s name and SSN. Place a fraud alert with any of them. (The first will alert the other two.) Contact any businesses listed on the report, where your child’s information may have been used.
Better yet, prevent problems in the first place by freezing your child’s credit. Most states allow you to do that (and your own, while you’re at it) so the hoodlums won’t be able to do as much with the stolen information. Also, don’t forget the basics: Never give out your child’s SSN unless absolutely necessary. Shred confidential information. To learn more, visit the Federal Trade Commission’s website: www.consumer.ftc.gov/articles/0040-child-identity-theft. Your future grown-up child will thank you.
Written by John A. Frisch, CPA/PFS, CFP, AIF, PPC