The most successful identity thefts are the most damaging to the victim.
Consider this: A thief gets a hold of the name and social security number of a person with impeccable credit, takes on loans and credit cards gradually enough to not raise red flags, then fails to pay the bills and disappears into thin air, leaving the victim with tens (or hundreds) of thousands of dollars of debt in collections to sort through, along with a torpedoed credit score that will take massive time, effort and paperwork to restore. When the victim is a child many years can pass before the crime comes to light, and several more years to restore the victim’s credit.
Children are targeted by thieves because they have spotless credit histories. Careful manipulation by a thief over the period of a year or two could set up the perfect opportunity for a huge heist. Many parents have no idea that they can – and should – take regular, proactive steps to avert identity theft. Protect your child from identity theft by starting with these two critical steps.
1. Guard your child’s social security number.
Very, very few people need access to your child’s social security number. Schools are not allowed to require it. If anyone asks for it, find out why they need it and whether service can be provided without it.
The truth is unless you (or your child) are asking for credit terms, such as to set up a payment plan for services, the provider does not need your social security number (SSN). Your child’s doctor’s office might ask for it on a standard form but you are not required to provide it. And if your child has health insurance, there is no reason for your doctor’s office to have your child’s social security number – your child will be identified by his or her member ID number. Indeed, most insurance carriers will not allow the doctor to refuse service to anyone who keeps their social security number private.
Furthermore, your insurance carrier doesn’t need it either! But when you let them know that you want to keep your child’s SSN (or your own) private, you might be told that you can’t. Talk to a manager and press the issue. Many first level customer service representatives simply don’t know that a social security number is not required.
Parent tip: The same rules hold true for keeping your own social security number private. Very few situations actually require it and releasing it is entirely up to you. You may be required to pay a cash deposit if you refuse to provide your SSN (such as to set up cable T.V. service or to get a cell phone on a monthly billing account). That’s because the provider can’t offer to set up your account without first running a credit check on you, and to do that they need your SSN. But a sufficient cash deposit negates the need for a credit check, and therefore your social security number is irrelevant and not needed.
Who should you give your child’s SSN to?
Financial institutions require a person’s social security number in order to open an account in that person’s name. Some insurance companies require the SSN of anyone named a beneficiary on an insurance policy. Your child will have to provide his SSN when he gets his first “real” job.
You may also need to provide a SSN to apply for certain federal or local government benefits, such as Medicaid or free / reduced lunch. But many of those benefits will actually be issued to the parent, not the child, so pay close attention to whose number they ask for.
2. Review your child’s credit
Your child’s best credit monitor is you. If you suspect fraudulent activity in your child’s name, perhaps because your child received a credit card offer or other junk mail, you have the right to find out if your child has a credit report card and, if so, to obtain a free copy.
Experian and Equifax both require that you make your request by mail and with proper documentation. TransUnion allows parents to inquire by email as to the existence of a credit report and provides instructions privately about next steps if a credit report is found. Experian further notes that children 14 and older can request their own credit files. Credit reports are not available online for individuals under the age of 18.
Your child’s credit report should be nonexistent until the time comes to start building credit. When that time comes, you can help your child start building a credit history by adding him or her as an authorized user on one of your own accounts.
Parent tip: Family members are sometimes the perpetrators of child identity theft. So don’t share your child’s social security number with anyone unless they have a valid reason for needing it. And to be extra cautious, in cases where the request is valid, such as a family member establishing an investment account in the child’s name, consider providing the social security number yourself directly to the institution that requires it.
The following statement should go without saying but experience tells us that’s not the case: Never obtain credit in your child’s name for any reason. It is illegal – and it’s absolutely wrong.
What if your child’s identity has been stolen?
If you suspect or discover suspicious activity in your child’s name, immediately contact all three credit reporting agencies to place a fraud alert on your child’s file. Fraud alerts are free for identity theft victims (and incur a small fee under other circumstances).