Identity theft occurs when someone uses the personal identifying information of another person for financial gain. Approximately 33% of Americans have been victimized by identity theft so chances are good that you or someone you know has been affected by this crime. Unfortunately, identity thieves are equal-opportunity fraudsters who target all ages. And sadly, the number of child identity theft cases is rising every year.
If you or someone you know is a victim of identity theft, the Financial Justice Initiative may be able to help.
A study published by Javelin Strategy and Research in November 2021 revealed that one out of every 50 children was targeted by identity thieves. The financial losses suffered by each family averaged $737 per household while overall financial losses totaled $918 million nationwide. You may be surprised to learn that child identity theft is not always an anonymous crime. Turns out 73% of child ID theft victims knew the perpetrators.
Michigan State University also released an identity theft study that found more than 1.3 million children become identity theft victims each year and 50% of those victims are under the age of 6. You may wonder who would take advantage of children in this way? The answers might surprise you.
Most child identity thieves fall into two categories—strangers, or family members and friends.
Most people envision identity thieves hunched over a computer in a dark room, scanning the web for vulnerable personal information. As you’ll see below, these unrelated criminals prey on our most vulnerable generation because children are easy targets with great financial opportunities.
Anonymous hackers are not the only thieves that take advantage of children. In many child ID theft cases, the “thief” is often a parent, family member, or friend. Although it may be hard to believe, family members can become so desperate, they resort to stealing a child’s identity.
Both situations present complications that may be difficult to resolve on your own. An identity theft lawyer at the Financial Justice Initiative may be able to help.
Unscrupulous thieves want a child’s personal information—Social Security number, date of birth, and home address—for many reasons. First, the child’s credit history is a blank slate with no negative credit history to deal with. Second, these crimes may not be discovered for several years. This long window of opportunity provides ample time to apply for credit cards and personal loans, open accounts, or steal other financial benefits using the child’s identity.
Usually, this type of child identity theft falls into two categories: a parent who is financially desperate, or a family member (often a stepparent) who has easy access to the child’s information and just can’t resist the opportunity.
Some parents have created such a poor credit history they can’t rent an apartment, pay the electric bill, or land a job to provide for their family. They resort to using the child’s information to re-establish credit fully intending to pay off the debt and clear the child’s history before they reach adulthood.
In other situations, a relative or trusted friend may have financial problems such as a gambling problem or such bad credit that they can’t buy a car, so they resort to stealing the child’s information because it’s easily available. Foster children are particularly vulnerable because their personal information is often shared with many people, and they may not have an adult watching over their finances.
In our experience at the Financial Justice Initiative, most clients first discover they are a victim of child identity theft when they enter college, request their own credit report for the first time, or enter the adult world after graduation. In addition to the financial damage that must be resolved, many victims suffer emotional damage when they are forced to confront a trusted family member or friend.
Since most children don’t receive credit cards or bank statements regularly, this situation may go undetected for years. If you suspect identity theft, you can contact the three major credit reporting agencies (CRAs) and request a manual search for yourself or your child. Request a search by name and Social Security number to see if a report exists and what is in it. We’ll discuss this step in more detail below.
But why would you suspect ID theft in the first place? Consider these situations:
If any of these red flags appear, you need to act quickly. Unfortunately, many cases of child identity theft go unnoticed until the child becomes an adult. The first time you or your child applies for a job or a credit card, opens a bank account, or tries to qualify for a college loan, a bad credit history can rear its ugly head.
[IMPORTANT TIP: A good time to pro-actively check for possible ID theft problems is at age 16. Ask the three major credit bureaus to do a manual search for the child’s credit reports. If you find problems, you can address them before applying for college loans, employment, an apartment, credit cards, a car loan, etc.]
First, contact the three credit reporting agencies (CRAs)–Experian, Equifax, and TransUnion to request a manual credit report search and notify each CRA that you suspect identity theft. This action will trigger the Fair Credit Reporting Act (FCRA) which protects you or your child and requires certain actions on the part of the CRA and any creditors who have reported information.
Keep in mind, children under 18 usually do not have a credit report unless someone has stolen their identity. Place a fraud alert on each report and ask the CRA to remove all fraudulent information related to the ID theft found in the credit report. You may also want to freeze the account so no one can request credit. If the child is under 16, a credit freeze should be free. The freeze stays active until you tell the CRA to lift it. Children who are 16 or 17 can lift the credit freeze on their own.
[IMPORTANT TIP: You can request a credit freeze on your child’s credit history even if there is no account set up yet. When you contact the CRAs, they will create an account using your child’s information and then freeze it so no one can use that information to open an account, apply for a loan, etc.]
Next, contact any company involved in the fraud and close all accounts opened by the thief. Explain that someone used stolen information to open these accounts. Ask the financial institutions to close the accounts, perform an investigation, and send written confirmation that you or your child are not responsible for those accounts.
Two other optional steps are also recommended: file a local police report and be sure to include every detail you can. Also, you can report the ID theft to the Federal Trade Commission at IdentityTheft.gov. Again, include all relevant details in your report.
Send all correspondence by certified mail and keep copies of all related documents. Keep track of any phone calls or emails, who you spoke with, the date of the conversation, and what was discussed. This information will support any future legal action you might have to take to resolve the matter.
Follow these tips to reduce your child’s chances of being an ID theft victim:
Even though more children are facing ID theft each year, the credit reporting agencies, banks, and creditors are not always responsive to resolving these issues. If you discover child identity theft and notify the credit bureaus, the Fair Credit Reporting Act will apply.
However, sometimes, even if you do everything you should under the Act, fraudulent accounts remain, debt collectors may hound you for payment, and the credit history is not corrected. If you are facing unresponsive agencies and creditors, it’s time to contact an experienced identity theft and FCRA lawyer.
The Financial Justice Initiative is a collaboration of two of the nation’s leading consumer protection law firms, Schlanger Law Group on the east coast and Terrell Marshall Law Group on the west coast. This unique joint project allows us to protect consumers throughout the country facing identity theft, unfair credit reporting, and consumer class actions matters.
If you have more child identity theft questions, schedule a free case consultation by calling (206) 350-2357 or fill out this simple form today.