As a parent, you teach your children about stranger danger.
But there’s a different kind of perpetrator kids need to fear — the friend or relative who might steal their identity and damage their credit history years before they’ve had a chance to establish it themselves.
Experts have long warned adults that they need to protect their personal information from crooks who fraudulently obtain such data. Using stolen Social Security numbers or credit cards and other financial information, identity thieves buy cars, get cellphones and open new credit card accounts.
This week, three organizations released the results of a child identity fraud survey based on responses from more than 5,100 U.S. households with dependents under 18.
First some good news. The incidence of child identity theft is low. The study found only one in 40 households with minor children affected by this crime.
But this doesn’t mean you shouldn’t be concerned. When children are victimized, the offense often goes undetected for a long time and it becomes hard to clear up the financial mess left by the identity thief.
“Any case of identity fraud involving a child is distressing because it can be a terrible experience for families and the child involved with serious consequences,” said Ann Wallace, president of the Identity Theft Assistance Center, one of the co-sponsors of the survey conducted by Javelin Strategy & Research.
Children between 6 and 11 are the most vulnerable, the report found. One woman, who was victimized starting at 11, said she only discovered the abuse of personal information when she tried to rent an apartment.
One item from the report really bothered me: 27 percent of those surveyed said they knew the individual responsible for stealing their child’s identity. Further, a majority of households in which children were victimized had more than one child, and in 37 percent of those cases, personal information on multiple children was stolen and used.
A 33-year-old Baltimore woman found out that her adoptive mother, who has the same name and middle initial, had victimized her for years. For a television program on identity theft, I interviewed a young man whose father, who shared the same name, used his information to get credit cards and even student loans. The son’s credit was ruined because his father didn’t pay the bills. The young man then spent years trying to persuade creditors that he hadn’t gotten credit cards or taken out college loans before he graduated from high school.
“During this study, we discovered powerful examples of child identity fraud committed by family,” the report says.
In one case, a mother found out about the crime but was physically threatened by the family member, who had a criminal history. She was warned not to call the police.
The study found that the most common way criminals use a child’s personal information is to combine his or her Social Security number with a different date of birth to create a new identity. Javelin Strategy and Research calls this “synthetic identity,” which is especially difficult to detect.
Whether from an adult or child victim, the most stolen piece of information is a Social Security number. Fifty-six percent of survey respondents reported being victimized this way.
The survey found that lower-income families are disproportionately affected by child identity theft — 50 percent of households in which child identity theft occurred had yearly incomes less than $35,000.
“Identity theft affecting minors may be crimes of desperation when perpetrators known to the victims fall on difficult economic times,” the report says. “Poor access to credit may be a push factor in perpetrators’ decisions to misuse children’s identities, and the high prevalence of certain nonfinancial account fraud types such as renting an apartment or house and opening utility accounts supports the case that fraudsters may be using children’s personal information to obtain access to or secure basic necessities.”
Here’s the take on this report: Be vigilant about keeping your child’s personal information safe. “People have to understand the same precautions you take for yourself you should take for your child,” Wallace said.
Don’t leave your child’s information lying out on your desk or in easily identifiable folders in your file cabinet. The Identity Theft Assistance Center along with Intersections, a leading provider of consumer and corporate identity risk management services that also sponsored the report, says if asked to provide your child’s Social Security number, ask these three questions: Why is it needed? Isn’t there another way to identify my child? How will my child’s information be protected?
“You have to think like the criminals,” Wallace said. “They think of information as a key to the lock. You have to think that way, too.”
Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071, or firstname.lastname@example.org. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to postbusiness.com.