As awareness of the dangers of identity theft grows, it’s important to highlight a particularly insidious threat: stealing children’s identities. Although children have very limited financial activity, this ironically makes them appealing targets for fraudsters.
According to Javelin Strategy & Research, 1.7 million children had their personal information stolen in 2021-2022, resulting in nearly $1 billion in identity fraud loss. In a recent PaymentsJournal podcast, Tracy Kitten, Director of Fraud and Security at Javelin, explained what makes children so vulnerable to identity theft and what parents and guardians can do to protect them.
Child’s Play
Obtaining a child’s personal information is alarmingly straightforward. When a criminal gets a child’s Social Security number, along with their physical mailing address and/or date of birth, that criminal possesses enough information to commit various forms of fraud, such as fraudulently opening bank accounts or applying for loans using the child’s information.
The COVID-19 pandemic exacerbated risks to children’s identities. Government recovery programs, in particular, saw a fair amount of stimulus-related fraud. Additionally, the increase in online transactions revealed authentication gaps that were challenging to address. While strides have been made to close some of those gaps over the past year, vulnerabilities still exist.
What’s tempting about using children’s identities is that they have no complicated background to deal with. “These kids don’t have bad credit,” Kitten said. “They don’t have any credit at all; so any type of account could be opened with a clean slate, maybe even a job application for someone who is here illegally.
What’s more, parents don’t readily detect this type of fraud. Since children aren’t applying for credit cards or mortgage loans, identity theft is not noticed until the child has reached maturity.
More Information in the Wild
For many of us, our Social Security numbers, along with our email addresses and passwords, are floating around the dark web. We’ve become more adept at handling breached information and are increasingly mindful about the information we share about ourselves online. However, all it takes is one slip—such as the exposure of your Social security number—to cause significant and long-term challenges.
“We like to think that the government is this well-oiled machine that knows everything,” Kitten said. “The reality, however, is that our information is everywhere, and we don’t have good checks and balances in place to detect and determine where it goes.
“You would hope that if someone were to steal my Social Security number, there would be a red flag raised somewhere, maybe at the Social Security Administration, to say, ‘Wait a minute, Tracy Kitten actually uses this Social Security number, but she doesn’t have this same date of birth, and she doesn’t have this same mailing address.’ But that’s not the case. That is why, oftentimes, you see identity theft that ultimately results in fraud taking place and going undetected for years and years.”
This problem is worse for children, because they aren’t actively managing and monitoring their personal information regularly. When a child’s data is breached, there is no system in place to immediately notify parents. Frequently, parents and guardians only discover such identity compromises when applying for a student loan or when their child seeks first-time employment. Sometimes, the realization doesn’t occur until the child attempts to buy a car or rent an apartment.
“We strongly recommend that financial institutions step in to provide assistance, even though they aren’t necessarily going to be the entity that will resolve all of this,” Kitten said. “At the very least, financial institutions can step in and give guidance, and assist their customers and their members.”
Without such oversight from their financial institutions, parents and guardinas should take proactive steps to safeguard themselves and their children. Kitten recommends several steps :
- Shortly after a child is born, contact the credit bureaus and take steps to establish credit in the child’s name, and then freeze the credit. Subscribe the entire family for identity theft protection coverage. An identity protection service can conduct in-depth monitoring of children’s identities. They proactively send alerts if they detect anything that might raise a flag about the compromise of a child’s personal information.
- Scale back what you post on social media, both about yourself and about your children. Take steps to limit what your children are putting out there. For example, date of birth is one of the key pieces of information a fraudster can use to steal someone’s identity, so be very careful about putting birthdays on social media.
- Look into additional security features that can keep your data safe. For example, using a virtual private network (VPN) for your home can add an extra layer of security for the entire family.
Finally, it’s important to highlight the emotional toll identity theft takes on the entire family. Beyond the financial implications, the thought of your child’s information circulating among cybercriminals and scammers can be overwhelming. The gravity of these concerns should motivate parents and guardians to take proactive measures to protect their children’s identities.
“If they know enough about my child to open up all these accounts, what else could do?” Kitten asked. “Not only does it take an emotional toll; it wreaks havoc with us psychologically. Are we physically safe? Are our children physically safe?”
