Minnesota has become the 28th state to enact a law protecting children from child identity theft. I have been warning you about child identity theft for six years and unfortunately, the problem is worsening. According to a recently released report from Javelin Strategy and Research, a million American children became victims of identity theft last year at a cost of 2.6 billion dollars in total losses to the families. In recent years, children have become a prime target of identity thieves who, if they are able to get identifying information on a child, such as the child’s Social Security number, can open a credit report on behalf of the child and obtain credit in the child’s name.  The identity thief never pays back the money accessed through the child’s credit and the child is burdened with a bad credit report that can have a harmful effect on the child when he or she applies for credit, applies for a job, applies for a scholarship or seeks to rent an apartment.  Often the identity theft is not discovered until years after it first happens which makes it more difficult to remedy.  A credit freeze is a tremendous tool for fighting identity theft because it prevents an identity thief who even has your Social Security number from accessing your credit report for purposes of establishing credit in your name. Unfortunately, the credit reporting agencies do not generally permit credit freezes for minors except in the 28 states that have laws permitting parents to put credit freezes on the accounts of their children.
TIPS
If you live in one of the states that has a child identity theft law and have minor children, you should contact each of the three major credit reporting agencies, Equifax, Experian and TransUnion in order to freeze your child’s credit.  In order to take advantage of these laws you need to set up a credit report for your child and immediately freeze the account. And while you are at it, you should also freeze your own credit reports as your best precaution against identity theft. For information about how to put a credit freeze on your own credit reports go to the Search for Scams tab at the top of the Scamicide home page and type in “credit freeze.”
Parents should, as much as possible, try to limit the places that have their child’s Social Security number and become familiar with the Family Educational Rights Privacy Act which helps you protect the privacy of your child’s school records and enables you to opt out of information sharing by the school with third parties.  Finally, the security company AllClear ID (www.allclearid.com) provides a free service called ChildScan which not only searches credit records tied to your child’s Social Security number, but also checks employment records, criminal records and medical records to recognize at an early stage if your child has become a victim of identity theft.
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