Child identity theft has become a big problem in recent years. According to 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. Children are prime targets 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.
Following a sixteen month investigation by the Social Security Administration, eight people from the two New York cities of Buffalo and Amherst were charged with identity theft from children as young as eleven years old. According to police, Darrius Outling of Buffalo stole Social Security numbers of children throughout the country and sold the numbers to others who ran up more than $400,000 in fraudulent purchases, all the while ruining the credit reports of the children whose Social Security numbers were used.
Since last September, a new federal law, which I first told you about in the Scam of the day for June 6th, that allows you to freeze and unfreeze your credit reports for free also permits parents or guardians of children under 16 to set up a credit report for their child and then freeze it at no cost. Everyone should have their credit reports frozen at each of the three major credit reporting agencies and parents should freeze the credit reports of their children.
For more information about credit freezes check out this article I wrote for the Saturday Evening Post which described credit freezes in detail.
Here are links to the three major credit reporting bureaus with forms and instructions for freezing your children’s credit reports. Unlike freezing your own credit reports, children’s credit reports must be done through the mail. Remember it is important to freeze your child’s credit report at all three major credit reporting agencies and although it is difficult to do at Equifax, it is still important to do so.
Once you have frozen your children’s credit, be sure to keep the PIN and information on how to unfreeze your credit reports in a safe place.
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