Child Identity Theft — and Bad Credit — Increasingly Common Among Young Children

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Not only are data-breach victims more likely to be fraud targets, but did you know that your kindergartner might already have bad credit?

That’s right – identity fraud is way more prevalent than you’d ever imagined, and more and more information is revealing how easily kids are quickly being victimized as well. Only after a child becomes an adult and gets rejected for a car loan or student loan is the crime exposed. This, of course, leads to the difficult task of trying to undo years – decades, perhaps — of damage.

In fact, the Federal Trade Commission and the Department of Justice recently held a joint forum to discuss ways to end the problems of child identity theft.

The meeting, held last week in Washington, DC, explored the nature of child identity theft, including foster-care identity theft and identity theft within families, with the goal of advising parents and victims on how to prevent the crime and how to resolve child identity theft problems.

One of the speakers at the “Stolen Futures: A Forum on Child ID Theft” forum was Tom Oscherwitz, chief privacy officer at ID Analytics. He thinks children deserve better protection, explaining that “a comprehensive solution to child identity fraud requires a layered approach reflecting advances in technology and business processes, legislative guidance, and consumer education.”

He cited a recent study conducted by his company that found that when children’s data is exposed, it is misused more frequently and can go undetected for years. In fact, the study found a startling 140,000 identity frauds affect minor children each year.

Oscherwitz explained that minors’ identities are particularly appealing to fraudsters because their personal data is untainted, legitimate, and less likely to be monitored for misuse.

An Ounce of Prevention

How can we prevent some child identity theft from occurring in the first place?

Michelle Dennedy, founder of The Identity Project, also spoke at the forum and noted that “unfortunately, in our society today, it’s not supposed to be — and was never intended to be a national ID — but the Social Security number has become the national ID in the United States, pragmatically.”

“All businesses ask for it. All schools ask for it. All healthcare providers, whether or not they’re supposed to, are still asking for it. And they’re not protecting it as a national ID,” she said.

She noted that parents should think about where their kids hang out. For example, as she noted, kids go to school, to the doctor, the Girl Scouts, religious organizations — yet “none of these organizations have, you know, highly encrypted back ends and fleets of security people and people who understand how to use all the technical and organizational protections that we give to our banking information. They’re left very wide open for use by other people.”

That’s an important distinction and one you should remember the next time someone asks for your child’s Social Security number — why is it needed, and more importantly, how is this highly sensitive information encrypted?

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Elaine Rigoli

Elaine Rigoli is PRIVATE WiFi’s manager of digital content strategy.