áPart 2 of 2
By Susan Beacham
It's Up to You to Protect Your Child's Financial Identity
Stealing a child's identity to open a credit account, apply for a loan, get a driver's license or rent an apartment can go undetected until the child grows up and needs to do a few of those things herself.
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A few years ago, our daughters, Allison and Amanda, then ages 12 and 13, began receiving credit offers in the mail. At first I laughed, thinking it was absurd that a middle-school child would be receiving such offers. Then I started to wonder why.
After talking with parents of other middle-schoolers, I came up with a theory. Many of us had recently applied for frequent-flyer numbers for our kids. Soon after, the credit offers started jamming the mailbox. Those frequent-flyer miles came with strings attached.
Certainly, the experience of a handful of middle-schoolers is not conclusive evidence that airline and credit card companies are in cahoots to get our kids into the credit world. But it was enough to convince me to take a hard look at all the mail that comes in for the girls and to be much more careful about giving out their personal information.
When someone - it can be a stranger, but more often it's a parent or guardian - steals your child's name, address, social security number or other personal information and uses it for their own financial gain, the first signs that something is wrong often come through the mail.
Signs of Possible Trouble
Monica, who did not want her real name to be used, didn't discover her identity had been stolen as a child until she was an adult. She had just become engaged and went to the bank to open a savings account with her fiancÚ. Their application was rejected, the bank told her, because she had bad credit.
"I assumed it was my college loans," Monica recalls.
To confirm it, she ordered a copy of her credit report and discovered, to her horror, that she owed more than $40,000 in credit-card debt.
Fortunately for Monica, she discovered that the credit cards were opened before she turned 18. "Because I was a minor, clearing up this mess was relatively easy."
Easy? I'm not so sure. Monica spent a year, doing tons of paperwork and assembling legal documents to prove that it was not her debt.
"Eventually, my credit was cleared," Monica says, "but it was a total pain and a challenge to gather all the information I needed and communicate with the proper agencies."
Monica had one more hurdle to overcome after getting her credit cleared: the emotional hurdle of realizing that it was her father who had stolen her identity and used it for his own personal gain.
Monica learned about the theft years after it happened. Today, tuned-in parents can help their children avoid what happened to Monica as a young adult.
Start by getting a current credit report if any of the following takes place in your child's name (only get a credit report if you suspect a problem):
- pre-approved credit offers
- collection notices for unpaid bills
- denied application for a driver's license
- denied applications for student loans, apartments or credit cards
- lots of calls from telemarketers asking to speak to your child
Fixing the Problem
Cleaning up financial identity theft involves the same laborious process, regardless of whether the victim is a child or an adult. First, contact one of the three credit reporting agencies - Experion, TransUnion or Equifax - to file a fraud alert (a call to one activates the other two). Next, report the crime to the police. Finally, start to contact credit issuers to begin the long process of clearing your child's records.
Laura Foley, founder of the nonprofit Identity Theft Resource Center, has written a step-by-step tutorial to help you navigate this process. It is available online at IDTheftCenter.org. Click on "Victim Resources" and select solution #5: "How do I order a credit report for my child?" Then, scroll down to the additional links for more "red flag" information. This will help you decide if you have a problem worth pursuing.
IDTheftCenter.org and the three credit reporting agencies do not recommend that you automatically check your child's credit report annually unless you suspect a problem. Ordering reports unnecessarily can confuse the computerized systems of the credit reporting agencies and open a door to thieves because it could establish a credit report, according to the Identity Theft Resource Center.
Child identity theft is easy to prevent. It's hard to fix, but easier to fix if caught early. Read the "red flag" information at IDTheftCenter.org. Be vigilant. If you see a "red flag" surface, go ahead and check your child's credit report. But, if all seems fine, relax.