We think of identity theft as an “adult” problem, but no one is immune from this crime. More than 1 million children in the U.S. were ID theft victims last year, resulting in losses of $2.67 billion, according to the 2018 Child Identity Fraud Study by Javelin Strategy & Research.
No one is too young to be targeted. Javelin found that two-thirds of the victims were under the age of eight. Another 20 percent were eight to 12 years old.
“And this is just the tip of the iceberg; odds are there were far more than a million victims last year,” said Al Pascual, Javelin's senior vice president for research. Minors are “an extremely vulnerable population with minimal ability to protect itself,” according to the report.
Another key finding: Data breaches are more of a risk for minors than they are for adults. Last year, 11 percent of all U.S. households had at least one minor. Of those who were notified that their information was breached, 39 percent of the children became fraud victims, compared with 19 percent of the adults notified about a breach.
“Children are more likely to become fraud victims after a breach because their core identity elements, like Social Security numbers, are more valuable for criminals,” Pascual told NBC News. “Criminals can have a field day with a child’s identity information because it’s never been used before. When a bank or other company pulls a credit report, they’re not going to find anything, and so the criminal has a clean pallet to work on.”
Fraudsters can buy a child’s Social Security number on the dark web for about two dollars, former ID thief Brett Shannon Johnson told NBC News. Johnson, who served more than six years behind bars, is now a consultant who specializes in fighting the crimes he helped perfect.
Parents should look for warning signs such as their child receiving pre-approved credit card offers in the mail.
A child’s SSN is typically used to create what’s called a “synthetic identity,” Johnson said. The thief takes the legitimate (stolen) number, adds a different name, birthdate, address and phone number to start a new and bogus credit file.
“Then you can go to town using it for whatever nefarious purposes you want,” Johnson said. “A crook can build up the credit score on that synthetic identity in about 30 days and then apply for loans and credit cards, get medical treatment or file fraudulent tax returns. By the time the crime is identified, by the time the child or parents discovers they’re a victim, the crooks are long gone and all you can do is try to clean up the mess.”
Last month, Sara Woodington, a single mom who lives in southeastern Pennsylvania, discovered that a crook in Texas had used her 17-year old son’s SSN to create a synthetic identity for himself. The fraudster had combined his name and address with her son Jon’s SSN to create a false identity, to get restaurant jobs in Austin.
Woodington's son, John, is severely autistic and cannot work. His mother lives on government assistance. Sara learned about the ID scam when her benefits were threatened because the government thought John was working in Texas.
Woodington fears her benefits will now be constantly threatened — and she worries what other damage this situation will create for her son.
“I have the man’s name and address, and no one will help,” Woodington told NBC News. “The police told me to go to welfare, welfare told me to go to Social Security, Social Security sent me to the IRS. It’s like a big bureaucratic circle. I’m extremely angry and extremely frustrated that no one wants to help.”
Sara is now getting help from the non-profit Identity Theft Resource Center. Eva Velasquez, the center’s president and CEO, told NBC News this is a common situation.
“Law enforcement is simply not equipped to deal with the epidemic of identity fraud,” Velasquez said.
Keeping it in the family
All too often, child-identity theft is an inside job. Javelin found that 60 percent of child victims know their perpetrator — a parent or guardian, other family member or family friend. By comparison, only 7 percent of adult-ID theft victims know who did it.
One reason it’s so difficult to prevent this familial crime: Many of these perpetrators have legitimate access to the child’s personal information.
“Children are just easy targets. They’re not monitoring their credit or monitoring their accounts,” said Javelin’s Pascual.
The most common identity fraud against children is new-account fraud — where the criminal uses their personal information to open a new credit card or bank account.
Rod Griffin, director of consumer education and awareness at credit monitoring giant Experian, advises parents to find out once a year if their child has a credit report — even if that child is too young to have a credit file.
For a minor 14 or older, go to annualcreditreport.com and request their credit report. If your child is 13 or younger, you will need to fill out paperwork to prove you have the right to this information. The site has detailed information about requesting a credit report for a minor.
“If there's no record on file, that's a good sign; it says your child's identity is not being used to commit credit fraud and that may be the only step you need to take,” Griffin said. “If the child does have a file for a legitimate reason — such as you made them an authorized user for your credit card — check the file to make sure everything is accurate and look for signs of fraud. If everything is in order, parents may want to freeze the credit file.”
In 29 states, parents, legal guardians or other representatives of minors are allowed to place a security freeze on that child’s credit report at each of the three credit bureaus. To start the process, go to TransUnion, Experian and Equifax.
“I’m a big believer in credit freezes for kids,” said Neal O’Farrell, executive director of the non-profit Identity Theft Council. “It closes that file off to new credit, the same as an adult credit freeze. It’s not going to prevent criminal impersonation, employment fraud or tax fraud, but it will prevent the creation of a new account, which is what most identity thieves want to do.”
Velasquez urges parents to look for warning signs that “someone is using your child’s identity to operate like an adult in the adult world.” These would include: A credit card bill, jury summons, driver’s license renewal, bills for medical care or other purchases, collection calls or notices, and pre-approved credit card offers.
“Don’t assume it’s a mistake or clerical error,” Velazquez said. “Don’t ignore these red flags. You need to follow up on them right away.”
Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.