Adults aren't the only ones who can have their identity stolen.
Tens of millions of American children had their Social Security numbers, date of birth and health care ID numbers stolen in the recent data breach at health insurance giant, Anthem Inc. This exposes these kids to the real risk of identity theft.
"Every terrible outcome that can occur as the result of an identity theft will happen to the children who were on that database," said Adam Levin, chairman and founder of IDentityTheft 911. "Criminals will use those stolen Social Security numbers to open accounts, get medical treatment, commit tax fraud, you name it."
Tim Rohrbaugh, chief experience officer at Identity Guard, calls the Anthem breach "catastrophic" and predicts the stolen information "will be used in waves of financial crimes" against American children for decades.
"This is a watershed event," Rohrbaugh said. "There is no other bulk acquisition of this much personal data - names, birthdates, addresses and Social Security numbers - that I am aware of in history."
And because the children's information was linked to their parents' data, it will make it much easier for cybercriminals to commit fraud against the parents as well, Rohrbaugh said.
The Social Security number was never supposed to be used as a national identifier, but it's become that. For an identity thief, that nine-digit number is the brass ring. It's the skeleton key that unlocks your life.
A child's number is even more valuable. Here's why: For most minors, their number is pristine - it's never been used and is not yet associated with a credit file. That means there's very little chance that the credit reporting agencies are monitoring it.
So a criminal can take that stolen number, combine it with someone else's name, address and birth date to create a fake ID - what fraud fighters call a "synthetic ID" - that can be used for all sorts of fraudulent purposes.
Security consultant Frank Abagnale, who inspired the movie Catch Me If You Can, said an identity thief would rather have the Social Security number of an elementary school student with no money than a middle-aged person worth millions.
"They will always take the child over the adult," Abagnale told NBC News. "And the younger the child is the better, because they have longer to use that identity before someone finds out."
All too often, this fraud is not detected until the child reaches legal age and applies for a student loan or tries to get a credit card. By that time, their credit history is ruined and it could take years to undo the damage.
Parents need to be on guard
"Now it's really all about detection," said Eva Velasquez, president and CEO of the non-profit Identity Theft Resource Center (ITRC). "Parents need to keep an eye out for any red flags that signal their child's stolen Social Security number has been used by a thief."
Those warning signs include:
- Collection calls or notices for a debt incurred in your child's name
- Mailings that would generally be for someone over the age of 18, such as pre-approved credit card offers, jury duty notices or parking tickets
- An insurance bill or explanation of benefits from a doctor listing medical treatments or services that did not take place
- A notice from the IRS that your child's name and/or Social Security number is already listed on another tax return
The ITRC has prepared A Guide for Parents - Child Identity Theft Indicators that lists many more red flags.
Fraud experts encourage all parents to check to see if their underage children have credit reports. All three of the major credit bureaus, Equifax, Experian and TransUnion, allow parents to do this at no cost.
"If they have one, it could be an indicator of fraud. If not, you probably don't have anything to worry about," said Experian spokesman Rod Griffin. "If your child has a credit history and you don't know why, you should be very concerned."
In that case, you should put a "freeze" on any fraudulent credit files - it's free - so that those files cannot be used to commit more financial fraud using your child's stolen identity. Then you'll need to work with the credit bureaus to remove the false information from that account. The Identity Theft Resource Center can help guide you through the process. Be advised that once your child becomes an adult, you'll need to contact the bureaus to get the freeze lifted or they won't be able to get any credit cards or loans.
Parents should do this fraud check once a year until their children become adults and can check their own credit history.
What is Anthem doing?
Anthem is offering free credit monitoring and identity theft repair assistance to current and former customers for two years through a company called AllClear ID.
Members with minor children can also sign up for ChildScan. This free service is designed to discover the hard to find cases where a thief takes a child's stolen Social Security number and combines it with someone else's name to commit theft.
Details on how to enroll are posted on the company's website.
"If you're being offered free monitoring, that's great, sign up," said digital security expert Brian Krebs, who writes the blog KrebsOnSecurity. "Just don't expect this service to stop identity thieves from ruining your child's credit."
A long-term problem
Don't let your guard down once all the hubbub about this breach dies down. ID thieves often sit on stolen information for many months or years before they use it.
"If I steal your credit or debit card number, I have to use it right away because it has a short shelf life before you shut it down," Abagnale explained. "You can't change your Social Security number. So if I steal that, I'm going to put it away for a few years. The longer I hold it, the more valuable it becomes."
Finally, don't think you're safe because you don't have Anthem. Remember, there are many other ways a crook can snag your child's Social Security number. As NBC News reported last week, the scammers who have been able to hijack tax returns prepared using online tax preparation software have access to every Social Security number on all those returns.