Protecting Children From Identity Fraud

 Hardly a day goes by without a news report mentioning identity theft or giving a heart-rending testimonial from its victims. Those victims are becoming more and more diverse, and increasingly the theft involves identities of young children. As an FBI investigator working on mortgage fraud recently discovered, numerous individuals and organizations are taking advantage of a loophole in federal lending regulations that do not require verifying the borrower’s age when identity verifications are done. The result is that many school-age become unwitting debtors. According to Linda Foley, co-executive director of the Identity Theft Resource Center, a nonprofit clearinghouse on identity fraud, “The credit issuers currently are blind, they have no way of knowing which year the social security number was issued, but even that wouldn't help, because it could have just been issued to a 40-year-old person who just got citizenship.”

At times, this problem is a family affair, with a parent or a relative with easy access to the child's social security number taking out a loan in their name. The Boston Globe's Erica Noonan reports that one of every five incidents of child identity theft is perpetrated by a family member. Sometimes they intend to pay back quickly after balancing out the family budget; other times their motives are more selfish and sinister.

The other eighty percent represents a growing market in pristine-credit social security numbers. Numerous on-line companies use special software to find so-called dormant numbers that are verifiably active but have no associated credit bureau records – most likely from children or long-term prison inmates – and offer them for sale to individuals looking to repair their credit – or just maliciously run up a huge tab on someone else's account.

Some of these companies, which skirt the provision against the publication of social security numbers by calling them credit protection / privacy / profile numbers (CPNs) instead, have lavish websites, while others advertise more discretely on websites like Craigslist, according to an Associated Press report. Avoiding calling their sales “social security numbers” places them in a legal gray area, making their action within the bounds of the law, although not at all honest.

What can you do to protect your child? Start with these common sense suggestions from the Christian Science Monitor. Also, consider regularly checking your child's credit profile with the three major credit bureaus, or just placing a freeze on the credit until they comes of age.