Stop ID thieves from stealing your kid's credit
Parents struggling to keep track of their kids' vaccinations, homework, dance classes and veggie intake have precious little time for other worries, but a serious new threat is demanding their attention: Identity thieves are increasingly targeting children, in some cases stealing their identities even before they are born.
As an investigation by NBC’s Jeff Rossen and TODAY revealed Thursday, criminals routinely use a child’s pristine credit record to their advantage and get away with it for years or decades — even if law enforcement knows exactly where the imposters live. TODAY showed this in dramatic fashion, hunting down two alleged child imposters and capturing their comments on camera.
Rossen’s story on TODAY also features a 9-year-old girl who is in default on utility bills, a teenager with $750,000 in debt, and a 2-year-old with a pile of credit card bills.
"You think this must be a joke, and then you realize, no this is actually incredibly serious," said Allison, the baby's mom, who asked that her last name be withheld. "Never in my wildest dreams had I thought to run a credit check on my son. And what parent would run a credit check on their child who's in diapers, who's crawling?"
TODAY's story follows a piece on msnbc.com’s Red Tape Chronicles last month that unearthed research showing child ID theft is more common than previously believed. Hard data is difficult to find, because most cases of child ID theft aren't discovered for years, but a recent check of 40,000 children by identity monitoring company Debix found more than 4,000 cases of tainted identities.
The issue for parents is this: What can I do to protect my child?
While the problem is clear, the solution is less so. The vast majority of kids don't have a credit report, and they shouldn't. In general, the Federal Trade Commission, the nonprofit Identity Theft Resource Center and the nation's credit bureaus advise against frequently checking your kids' credit unless there's some reason to believe they've been victimized by identity theft. Repeated requests for a child's report can actually do more harm than good. The Identity Theft Resource Center warns that it can lead to the premature creation of a credit file, which could make it easier for an ID thief to exploit the child’s identity.
Still, it's understandable that parents might want to check on their kids identities occasionally, particularly after hearing TODAY's story. So here are a few helpful resources.
Getting a child credit report is different
Standard advice for getting a credit report doesn't apply to children — kids' reports cannot be obtained using the congressionally mandated free credit report website, http://AnnualCreditReport.com. Requests for information on a juvenile from the site will be immediately rejected. There are legal reasons for this, according to Susan Henson of Experian, one of three major credit reporting bureaus — the Children's Online Protection Act restricts the collection of information about kids under 13 years old. Also, information about a third party can only be disclosed after the requester provides proof of legal guardianship, and that can't be provided through the website. So all three bureaus require direct contact to get kids' credit reports.
First stop: Trans Union
Trans Union has the most parent-friendly process, with the only online application specifically for child inquiries, so that bureau is the best place to start. Detailed instructions are included on its site.
Parents who use this online form will receive an initial e-mail, and then a follow-up letter, which will include a simple yes/no answer on the existence of a credit report.
If Trans Union says there is no report, odds are good that your child is in the clear. But if there is a report — or you have a specific reason to believe your child is a victim — you'll want to follow up with the nation's other two major credit bureaus — Experian and Equifax — and get a report from them, too.
The Identity Theft Resource Center offers a handy form that parents can use to send to any of the three bureaus. It can be accessed here.
For children between 14 to 18 years old, the process is different — if they have a report, it would be possible to get a credit report through http://AnnualCreditReport.com, but “the vast majority of consumers this age do not have a credit file,” Henson said. They generally receive a simple rejection message from the Web site, which might not be satisfying for a parent who fears their teen-ager’s identity has been stolen. In that case, follow the instructions above.
When should you check their credit, and what if there's foul play?
Advice for concerned parents on this point is nuanced. Both the FTC and the Identity Theft Resource Center say parents should not check their kids' credit reports on an annual basis.
Both agree that parents should attempt to obtain a credit report on the child's 16th birthday. Ideally, there won't be one yet; but if there is and it's full of errors, there should be ample time to deal with the problem before the child applies for college financial aid or their first loan. For kids under 16, under normal circumstances, an occasional check — perhaps every three or four years — is sufficient, said the FTC's Steven Toporoff.
But if there is a reason to suspect foul play, parents should immediately contact all three credit bureaus and request a report, he said. They also should consider placing a credit freeze on the child's records, following their state's particular policies.
State-by-state rules on applying for credit freezes can be found here.
Signs of foul play would include: Surprising offers for credit or other offers mailed to the home, or trouble opening bank accounts for the children. Also, strange identity-related questions when applying for schools or outside activities could be a tipoff. A bank or school might find that there are other identities linked to your child's SSN during a routine check. The bank probably won't tell a parent directly, but often, tellers will hint that there's a problem.
It's important to note that a child's identity could be compromised, even if there is no evidence on a credit report check. One particular kind of identity theft, called SSN-only ID theft, can escape traditional credit reports. Most commonly associated with undocumented workers, a SSN-only thief uses someone else's Social Security number but his or her own name to obtain employment and credit. Records of these imposters often end up in a separate file at the credit bureaus than that of the rightful holder of the SSN, and this file is not disclosed during regular consumer credit checks. If you have reason to believe your child's credit is compromised in this manner, a clean credit report — or no credit report at all — should not be taken as an absolute clean bill of health for the child's identity.
Jay Foley, executive director of the Identity Theft Resource Center, says parents don't need to panic over evidence of identity theft, but they should realize they are facing an uphill battle. Obtaining information on SSN-only ID theft can be tricky.
"Unless the child is being chased by collection agencies, my suggestion is to wait until the child is 16 years old and then the parents need to write a letter to the credit reporting agencies requesting any information on the child's name in combination with the SSN and any information on the SSN alone," he said. "If at that time they find something wrong we have roughly two years (in most cases) to get it fixed or replaced."
The Identity Theft Resource Center, for free, will assist parents in disputing all erroneous entries on credit reports. An FTC guide to disputing errors can be found here.
The agency will also help parents address the possibility that an imposter is using their child's identity to obtain a driver’s license or escape conviction records or child support payments.
Several for-profit companies also offer to help parents protect their children's identities. AllClearID.com, mentioned in TODAY's story, is temporarily offering a free scan of its database of credit records for signs that a child's identity is compromised. Click here to visit the firm's website.
Experian offers a product called FamilySecure, priced at $20 a month, which promises to monitor for signs that a child's identity has been compromised.
It’s important to note, however, that none of these commercial products provide foolproof protection against child ID theft.
Find more tips like this on Red Tape Chronicles.