Preventing Child Identity Theft

Carelessness with personal information may hurt a child’s chances of having a healthy credit history.

Taking necessary measures to protect one’s own identity is extremely important—but it’s just as important to protect a child’s. Parents can be busy filling out documentation relating to school enrollment and for participation in clubs or other extracurricular activities throughout the school year. Personal information is dispensed that identity thieves can use to sign up for a credit card or secure a loan. A study established that 2.5% of households with children (18 years and younger) have experienced child identity theft. 

Child identity theft often goes undetected.
Adults have numerous ways to detect identity theft because there’s a paper trail to follow and examine: bills, statements and notifications that arrive at regular intervals. Unusual activity, unauthorized payments and other evidence of identity theft will usually show up, as long as we take the time to look over this documentation. Many people also guard against identity theft by monitoring their credit scores. A sudden change in a credit score can indicate unauthorized use of your credit card, bank account, or personal data. 

Because children don’t have a credit history, parents wouldn't be checking their child’s credit information to check for identity theft.  Child identity theft can happen when the thief uses a child’s social security number to secure a credit card or a loan. Armed only with a child’s name and social security number, the thief can use a false birth date to create what’s known as a “synthetic identity.”  A “synthetic identity” can be created when the thief combines a social security number with a different birth date.

Preventing child identity theft involves awareness and action.
A small measure of diligence can go a long way toward protecting against child identity theft. For starters, it’s wise to discuss identity theft with your children, stressing the strategies that can be used to thwart this illegal activity. Never give out a child’s social security number unless it’s absolutely necessary and you feel confident that it will be secure. If possible, put paperwork with identity information through a shredder rather than simply tossing papers intact into the trash. 

Urge children to keep passwords confidential, whether it’s for a computer or for access to websites and online accounts. For children, computer identity theft may not result in financial losses. However, there’s definitely potential for emotional damage though social network postings. 

Establishing the relationship between identity theft and credit scores.
Most financial advisors encourage parents to help their children start building a credit history before they go to college. Discussions about identity theft could provide a good opportunity for parents to explain the importance of good credit and how identity theft can harm your credit score. Those first steps towards adulthood –getting a job, opening a bank account, getting a credit card—can also be the beginning of a good credit history.