This post is sponsored post by Lexington Law Firm.
Even if you are diligent about protecting your identity and credit online, your children can be at grave risk.
A report from Javelin Strategy & Research found that in 2017, more than 1 million U.S. children were victims of identity theft, resulting in $2.6 billion in losses.
This fraud cost families $540 million in out-of-pocket expenses.
Children are especially vulnerable to online fraud predators, experts say, because their clean-slate credit reports make it easier to obtain credit cards, loans, apply for jobs, utilities, government assistance and other uses for stolen identities.
Further, the crime is often undetected for years since kids rarely need to check their credit reports.
Only when a teen applies for an auto or student loan, is the identity theft discovered — often many years after the fact.
The Javelin study found that two-thirds of juvenile identity theft victims were 7 or younger!
How does child identity theft happen?
Kids are most likely to have their identity stolen by someone they know, because parents, babysitters, grandparents or other relatives have easy access to the kid's Social Security number, birthdate, address and other personal information required to obtain credit.
It’s tough to think of people we trust as capable of harming our children, but you can never be too careful when it comes to personal information.
It’s also possible for someone to get ahold of your child’s personal information via a data breach, including school, camp, medical and other forms you knowingly filled out.
The Javelin research also found a strong correlation between children being bullied online and identity theft.
Kids who are harassed on social media often over-share personal information that is then used to steal their identities.
What can happen if my child’s identity is stolen?
If someone fraudulently opens an account or starts a service using someone your child's information ruin your kid's credit score and history.
For example, if a thief rents an apartment and turns on utilities using your child's information, and those bills are left unpaid, your child's credit score will plummet.
If this information is used to commit a crime, then your child now has a criminal record.
Fortunately, erroneous marks to your credit history and criminal history can be cleared up, but this can be a costly and time-consuming process.
Plus, as any victim of identity theft will tell you, being hit with this violation is an emotionally devastating process.
What can I do to keep my child’s identity safe?
Thankfully, there are some simple steps you can take to help keep your whole family's identity and credit histories safe.
Keep personal information safe
One of the easiest things you can do is make sure that you store any identifying information in a safe place.
Shred financial, medical and other documents that have personal information — identity thieves often go through trash or root around your personal files for this data. A housekeeper, babysitter or relative might find these hard copies when visiting your home.
Monitor your kids' online activity for over-sharing of personal information. Again, keep this in mind when ensuring your child is not being bullied online.
Making sure your home wi-fi network is password protected by an unusual username and password.
Delete all unused accounts. Music, movie, banking, shopping, games and other accounts that you have not used in the last 30 days should be closed and deleted. (Bonus: you might also save money when you realize you are paying monthly subscription fees for services you don't use!)
Always, always, always keep your child’s Social Security number close. If it’s on paper (like a Social Security card), keep it locked away somewhere safe. Never share that number unless you absolutely have to.
Consider paying for an identity monitoring service. Reputable organizations like Lexington Law offer affordable services that send you an alert every time there is a new inquiry on your credit report, as well as other indicators of financial fraud.
Are there warning signs that my child’s identity has been stolen?
Things to look out for:
- Contact from a debt collector asking to speak to your child. As absurd as such a call may seem, do not ignore such calls. This could be a huge red flag that something is wrong.
- Any sort of credit card offer or application that’s addressed to your kid.
- The IRS sends a notice about your child failing to file taxes (again, major red flag).
- When you’re applying for something for or with your child (for example: your teen seeks a car loan, job or student loan) and find out they already have a credit history.
What do I do if my child’s identity is stolen?
First, pull a credit report and score from the big three credit bureaus — Experian, Equifax and TransUnion.
By law, everyone is entitled to one free report per year, and legal guardians and parents are entitled to their child’s credit report.
Keep in mind: Be on the lookout for any credit report, as its unusual for anyone under age 18.
After all, a 12-year-old should not be applying for a mortgage or business loan!
Call the police
Double-check to ensure there’s no valid explanation (like you signed your child up for something but forgot), and then it’s time to call the police.
It’s possible that nothing will ever come of filing a police report (it’s a challenge to investigate and resolve these kinds of crimes unless there’s a clear paper trail to the perpetrator), but it’s important to have proof you’re addressing the situation properly, as well as help authorities track and crack down on this issue.
Also, if any criminal activity was conducted using your child's identity, contact the law enforcement agency pursuing those crimes.
Establish that your kid's information was stolen, and ask that a clearance letter be sent to establish that your kid will not be held responsible for the related wrongdoing.
Take steps to clean up your child's credit report
You can do that directly through the big three bureaus. The Federal Trade Commission also recommends contacting every business where credit reports show your child’s information was misused.
You’ll also want to file a report with the FTC (go to identitytheft.gov for more information), and contact each business where your child's identity has been erroneously used. Explain that the account was fraudulently opened (this is where the police and FTC reports are useful), and ask the account be closed.
Ask for a letter confirming the closure and relieving you of responsibility for the account, be sent to you.
Repeat these steps for fraudulent charges made to any accounts in your child's name.
Now, it’s worth noting that you can also freeze a credit report, but some states require you create a credit report for your child in order to so.
According to Lexington Law, the downside of that is that simply having a credit report can make a child more likely to fall victim to fraud, so this is not always the best move if there’s not already a report.
Remember: You and other adults in your household should take the same precautions with your identity and credit report, too.
The last thing you want to find out when you’re applying for a loan or a new place to live is that your identity has been stolen and your credit compromised — especially if you still have a dependent child.
Can a credit-repair company help with identity theft?
Cleaning up a credit report that is rife with fraudulent activity is accessible to everyone. It is not rocket science, but this process does take time, patience and organization.
Many people successfully turn to credit repair organization to help with this process.
Warning: There are a lot of sleazy businesses in this space, taking advantage of parents fraught with frustration, guilt, and rage. Learn more about what to look for in a credit repair organization in this article: Should you pay for credit repair?
Lexington Law is one of the oldest credit repair organizations focuses in helping people fix their credit.
The organization’s services include credit monitoring, and credit repair, in which they will comb through all of your credit reports, find errors and fraudulent marks that can be challenged, and incorrect dates and debts that are too old to legally be included in your report.
Then they challenge errors and fraudulent items with creditors on your behalf.
The cons are that you pay for a service that you can certainly do yourself, with fees that start at $89.95 per month.
Keep in mind that poor credit is a very expensive position — even if it is not your, or your child's fault. Higher interest rates, being denied a job or application to school can dramatically affect a person's finances — and life.
The pros of using a reputable credit repair service like Lexington Law is that they will take over this confusing and time-consuming process, ensure that all your rights are being honored, and work to prevent future fraud.
Especially during an emotionally fraught time, such a monthly fee can be well worth the investment.
Emma Johnson is a veteran money journalist, noted blogger, bestselling author and an host of the award-winning podcast, Like a Mother with Emma Johnson. A former Associated Press Financial Wire reporter and MSN Money columnist, Emma has written for the New York Times, Wall Street Journal, Forbes, Glamour, Oprah.com, U.S. News, Parenting, USA Today and others. Her #1 bestseller, The Kickass Single Mom (Penguin), was named to the New York Post's ‘Must Read” list.
Emma regularly comments on issues of modern families, gender equality, divorce, sex and motherhood for outlets like CNN, Headline News, New York Times, Wall Street Journal, Fox & Friends, CNBC, NPR, TIME, MONEY, O, The Oprah Magazine and The Doctors. She was named Parents magazine’s “Best of the Web,” “Top 15 Personal Finance Podcasts” by U.S. News, and a “Most Eligible New Yorker” by New York Observer.