Kids can be a real danger when it comes to identity theft. From one angle, they can be more exposed to identity theft issues, because they rely on you to protect their information. From the other perspective, though, kids can easily put you at risk of identity theft.
Children can be the targets of social security identity theft when family members decide to use their information for themselves. In some cases it may seem like a good idea, a classic example commonly seen is a single parent recently out of a relationship – often the parent has damaged credit, and that can get in the way of getting utilities turned on. Obviously, the parent has to take care of the kids, and a clean social security number is right there at his or her fingertips. The intentions are in the right place, so it can be hard to find fault with the minor infraction… in fact, most judges would probably dismiss the case if it came before them.
The problem for the child comes in when financial issues continue to plague the parent, because it isn’t reflecting on the parent’s credit anymore, it is reflecting on their kids. What seemed like a good idea at the time ends up dragging down the child’s ability to take charge of their own life when they come of age. Imagine a 16-year-old who just got his license, and has spent the past summer working to save enough money to put a down payment on a car. He excitedly puts his social security number on the credit application, ready to pick up his financial responsibilities, but his first taste of independence is the a credit debt bigger than the price tag of the most expensive car on the lot.
But not every case is rooted in such noble intentions. Just as often, a child will find their credit is completely ruined by an estranged parent or other family member who had access to their social security number, and spent the past 10 years living under his or her name – working, or even taking out loans that they don’t bother to pay back. Some kids don’t find out until they head off to college, and get declined for their student loan. Not just a rude awakening to the harsh financial realities of life, when this happens, your child has to now put their life on hold while they try to straighten out the mess – and that can be twice as difficult since they don’t even have prior experience dealing with credit, banks, etc.
The other issue to keep an eye on when you’re considering your child and identity theft is what they are doing with your personal information. Driven mostly by the fact that recreational technologies target children and young adult, many parents simply give their kids credit card information to buy songs for their iPod or access game servers through the X-Box Live or PS3. But all most kids know is that those 16 digits are a gateway to getting pretty much anything they want, and parents may find themselves with expensive bills in just a month or two because a son or daughter beefed up an avatar online, stockpiled some weapons on their new Halo game, etc.
Protecting your kids from identity theft has to take a dual approach. First, it’s important to keep their information secure so it isn’t misused by friends or family. Keep social security cards under lock and key, not just tossed into a desk or dresser drawer. Insurance papers often require their social security number, too. Take a few minutes to look over the information you get from the insurance company, school, or any other organization they are involved in. If you see a full birth date, social security number, or some other critical piece of personal information, the document should be shredded, or if it has to be kept, locked up away from prying eyes.
Just as important is teaching kids how to protect you personal information when you give it to them. This should be more than a 3-minute conversation. (“Now don’t give this number to anyone, OK?” “Whatever , Dad.”) In fact, some parents won’t let their children have credit card numbers until they have had several conversations about financial responsibility, and how to protect the information they are given.
Even with these safeguards, though, kids can accidentally compromise critical personal information that can them (or you) exposed to identity theft.
This brings up a final point: some parents want to keep on top of their kids identities, and will pull a credit report using the child’s social security number. This is unwise, because a credit reporting agency like Experian or Equifax may just decide to create a new credit file to track the information before they tell you there is nothing in there. But the next time someone tries to access that information, the file exists, and only shows that no credit has been issued in that name yet.
And a clear credit record is an identity thief’s golden ticket to a spending spree.