As identity theft has surged in recent years, more of the victims have been children. But a growing number of states are pushing back.
Take Wisconsin, where lawmakers recently approved legislation known as the Child Credit Protection Act. The law is designed to make sure that a child’s personal information cannot be used to open a credit account until he or she is at least 16 years old.
Under the act, parents can pay a $10 fee to each of the three main nationwide credit bureaus — Equifax, TransUnion and Experian — to create a credit record for a child. The agencies will instantaneously create a security freeze on the account to prevent identity thieves from opening credit accounts in the child’s name. Once the child turns 16, parents can request that the account be unlocked.
Wisconsin joins seven states that have passed similar laws, according to the Identity Theft Resource Center. Several other states, including Texas, are considering legislation.
The legislative momentum started in Maryland in 2012, when it became the first state to create a law to help parents protect their children from identity theft.
Supporters say the state laws are needed because children have become increasingly vulnerable to identity fraud and the credit bureaus have not been proactive enough.
Crooks know that a child will not be applying for credit cards or taking out loans for years, which creates a large window of opportunity for abuse. Moreover, parents don’t expect their child to have a credit file and as a result don’t request to check it for possible illegal activity.
Young victims might not feel the pinch until they apply for a credit card, a home mortgage, or car or student loans.
Recent studies have revealed the scope of identity theft crimes on minors.
A 2011 Carnegie Mellon University study — based on a review of the credit files of more than 40,000 children — found that 10.2 percent of children under the age of 18 saw their Social Security number compromised. That percentage is dramatically higher than the 0.2 percent rate for adults in the study.
Indeed, Social Security numbers are the most common form of child identity theft, Sadly, trusted friends or family members frequently commit the fraud, and the crimes often take a year to detect and resolve.
Since the state laws are in their infancy, there’s no evidence yet of any impact. But “we’re a friend of any legislation that helps to give tools” to parents to protect a child’s identity, said Eva Velasquez, chief executive officer of the nonprofit Identity Theft Resource Center in San Diego.
While most states have followed Maryland’s approach of freezing credit accounts, Utah devised a slightly different model. Through a partnership with TransUnion, parents can enroll children up to age 16 in its identity protection program. The information will be entered into a high-risk fraud database, which will trigger a security alert when illegal activity is detected.
And if you don’t live in a state that provides legal protections, there are other options.
Several protection services have cropped up in recent years. They typically charge a monthly fee to monitor your credit accounts. In addition, a free service called ChildScan is offered by AllClearID.com It combs through credit records, employment records, criminal records and other accounts to determine if a criminal has been using your youngster’s Social Security number.
Despite the security safeguards, no system is truly foolproof. Seemingly every week, there’s ample evidence that cybercriminals remain one step ahead of those trying to stop them.
Still, parents can do a lot to protect the personal information of their children. Keep their Social Security card, birth certificate and other important documents safely locked up. Also, don’t let kids carry their Social Security card. And talk to your kids about safe online habits, such as passwords and limiting the amount of personal information shared on the Internet.
For more tips, check out the Identity Theft Assistance Center website at www.identitytheftassistance.org.
What else can parents do? Prod your state representative to provide protection from identity criminals. As Velasquez said, “This is a no-brainer. Who doesn’t want to protect children?”
To reach Steve Rosen, call 816-234-4879 or send email to email@example.com.