Imagine this, your daughter is 17 years old and getting ready to finish high school and enter college. The big decisions have been made and the paperwork has been filed. However, you just got notice that she’s in jeopardy of not getting the financial aid or scholarships you’ve been counting on because over 10 years ago, someone starting using her social security number to open several credit card accounts and even took out a mortgage. Unfortunately, this exact type of scenario is playing out every year. In some cases it’s a result of an accidental transposing of a social security number, but in others it’s an intentional act of identity theft. Regardless of the intentionality, your child could be left with a long, daunting process that could throw a wrench into all their early adulthood plans.
As parents, one of our basic instincts is to protect our children. While we’re quick to step in the way of a physical danger, the thought of protecting our child’s personal information from identity theft may not trigger those same guardian instincts.
Identity theft occurs when someone uses personally identifying information, like your name or Social Security number to commit fraud or other crimes. The perpetrator could be an organized criminal halfway around the world or a family member in a desperate situation. Regardless of who poses the threat, we need to do what we can to prevent any real damage from being done to our children because a stolen identity can generate some significant headaches and consequences.
Why Would Someone Want to Steal a Child’s Identity?
You may be wondering why anyone would want to steal your child’s personal identification. After all, they don’t have a credit card to use, a bank account flush with cash or a personal tax return to fraudulently file on their behalf. So, what is the value of this information in the hands of a criminal?
The reality is that a child’s information is more valuable than an adult’s and the rate of identity theft among children under the age of 18 is higher than it is for adults. The IDs of most minors have never been used, so they present criminals with a blank slate. On top of that, since a child’s ID probably won’t be used for several more years and is likely not being monitored by parents, it makes the risk of detection low and the shelf life long.
The stolen information can be used to obtain false IDs for employment by people that don’t have a valid social security number, open fraudulent credit card accounts, claim tax credits on a tax return or get around bad credit when applying for utilities or renting an apartment. Regardless of the use, the reality is that any activity under your child’s identity is creating a record in their name that is not a true representation of their credit-worthiness. Unfortunately, this record will be trusted as an accurate resource by financial institutions and future employers until it gets cleaned up.
What Can I Do?
Ecclesiastes 10:18 – “Through laziness, the rafters sag; because of idle hands, the house leaks.” [NIV]
As with adult identity theft protection, there’s no way to remove all risk from the equation. Our real goal is to minimize the risks and be pro-active in monitoring their information so we can minimize the damage if a situation arises. Here are some helpful tips:
- Check their credit report – The FTC recommends checking to see if your child has a credit report starting around the time they turn 16 years old. Your child shouldn’t have a credit report to run because that is a record of credit activity. If there is one and the information isn’t accurate, you will want to notify the credit reporting agency and then file a police report and a complaint with the FTC as a starting point.
Note: For younger children you may need to contact each of the 3 national credit reporting companies directly to request their credit report. The official site to run a free credit report for yourself or an adult child is www.annualcreditreport.com.
- Protect their information – Keep your child’s sensitive information in a safe place at home and don’t freely pass it out. It’s true that doctor’s offices and schools often ask for social security numbers. You can leave those spots blank and if they insist on having it, ask them why they need it and what measures they take to protect that information. Once the information is out there, you lose some control and want to know what’s going to happen with it.
- Use your information instead – If your child is signing up for a service or rewards club, consider using your personal information rather than using theirs. The vendor may do what they can to protect the information, but accidents do happen. It’s better to not put your child’s information out there if you don’t have to.
- Consider freezing their credit – While freezing credit is a wonderful idea for adults, it’s a little trickier when it comes to doing it for a minor. Adults can go online and freeze their credit pretty quickly, but for children, you will likely need to call each credit agency (TransUnion, Equifax and Experian) and then supply them with documentation through the mail to place a credit freeze. In some states, there can also be a charge associated with freezing a child’s credit. While it may not be easy, if you detect a real threat, it’s often still be easier to prevent the damage than to clean it up after it happens.
- Monitor mail received in your child’s name – If you start receiving credit card or other financial offers in your child’s name, it could be an indication that their information has been compromised.
- Teach your children internet safety – The internet can seem like a fun and innocent place to our young children, so we need to educate them on ways to be safe. This involves teaching them how to set up secure passwords and warning them of the dangers of sharing personal information or downloading programs from an unknown source.
We ultimately trust in God’s sovereignty, but we also understand our human responsibility. A balance of the two will have us doing what we practically can to protect our children from an identifiable threat while resting in the sovereign grace and control of our Lord.
Psalm 127:1 – “Unless the Lord builds the house, the builders labor in vain. Unless the Lord watches over the city, the guards stand watch in vain.” [NIV]
Brad Graber, CFP® has been working with clients on personal financial planning and investment issues since 1996. He invests his time mentoring and educating individuals on ways to be better stewards of the resources God has entrusted to them.