Recently the operators of the online children’s game site RockYou settled a claim of the Federal Trade Commission that it did not properly protect the privacy of its users and failed to use proper security resulting in the site being hacked and the information on 32 million users being compromised. This particular website by being aimed at children also violated the Children’s Online Privacy Protect Act Rule or COPPA which requires website operators to notify parents and get their consent before collecting, using or disclosing personal information from people under the age of 13.
You are only as safe from identity theft as the places that hold your information. Try to limit the places that have your personal information and find out what security measures they take, such as encryption of the data. You should also educate your children about the dangers of downloading free music or games because that is a common way that scammers install keystroke logging malware on your computer that can steal all of the information from your computer.