Child Identity Theft Read online

Home mortgages are but one of many purchases thieves target with your child’s information. There are others, and I will discuss them in upcoming chapters. Good credit buys automobiles, high-dollar electronics, and furniture. It also buys vacations, jewelry, and more. The thieves can be strangers or someone you or your child knows.

  Larry, for example, was nineteen years old when he discovered his identity had been stolen several years earlier. According to Good Morning America,2 not only was he $100,000 in debt, but he had a $41,000 mortgage. Tragically, he later discovered that the identity thief was his father. Now twenty-eight years old, he’s spent the last nine years trying to clean up his credit. He still hasn’t turned his father in to the police.

  Larry’s case is not an isolated incident, as you will read later in the book when I cover the emotional trauma of child identity theft committed by relatives. Identity thieves come from all walks of life. Our economy has weakened, and the instances of relatives “borrowing” a child’s identity have risen. That a relative would steal from a child is unbelievable, but it happens daily. Parents have the responsibility to care for children. Sometimes, though, stealing occurs as parents fall on hard times.

  Each child needs to realize that a child’s identity is his or her own. Their personal descriptive information is not meant to be shared or held in joint. Children share many characteristics and commonalities with their parents—things like physical appearance, a home address, telephone number, likes and dislikes, tastes, or beliefs. Children will also share commonalities with other children, such as birthdays, schools attended, sports participated in, church memberships, or friendships.

  Regardless of what we have in common with someone else, however, our federal, state, and local laws require that each person be unique, identifiable, and separate. This is the driving force behind the development of a Social Security number that is unique to each person and never intentionally duplicated.

  If you ask any victim, or parent of a victim, of child identity theft, they will say that it is a devastating crime and a life-changing event. When you have something as personal as your identity stolen from you, it shatters your sense of security, and it can take years to undo the damage. Your identity is your life. While it may be just a name to someone else, to you it is everything.

  Question #2: How big of a problem is child identity theft?

  While books on child identity theft are almost nonexistent, statistics on identity theft are plentiful. A recent report from Javelin Strategy and Research3 identified 9.9 million Americans who became victims of ID theft. These thefts resulted in the loss of 48 billion dollars. According to ABC News/Money, “depending upon the study or report you read, from 140,000 to more than 400,000 young people per year become victims of a crime that may not necessarily impact their daily lives when it occurs, but can have devastating long-term financial and emotional repercussions.”4

  The federal agency responsible for tracking identity theft and child identity theft is the Federal Trade Commission (FTC). FTC data shows that historically 5 percent of all American victims are children, and this number is increasingly rising. According to a Carnegie Mellon CyLab Child Identity Theft Study,5 a survey of 40,000 children found that 4,000 of their identities had been compromised (10 percent).

  Child identity theft is much more complex than identity theft involving adults. In the chapters of this book, we will help parents fully understand why children are targeted instead of adults, what constitutes child identity theft, and who is targeting and stealing children’s identities. We will look at a new term called “identity cloning,” as well as the targeting of children with passports, foster children, and children of certain demographics. This book will also help parents decide when is the best time, among the many options, to obtain a child’s Social Security number.

  We also look heavily at preventive measures that you can proactively take to protect your child and all school students. These measures include parents and teachers sitting down with their children and students to discuss what “private” information is; online security; obtaining your child’s credit report; opting out on business transactions; registering in the National Do Not Call Registry; shredding documents; and being alert for scams.

  The information in this book includes sections to assist you in the reporting process should your child become a victim. A step-by-step guide is crucial, as your family will be devastated, overwhelmed, and in need of guidance through the web of agencies that need to be notified. You will also need emotional support and counseling for both you and your child.

  Yes, child identity theft really is that big of a problem. When the economy is bad, criminal behavior increases. Identity theft has become so prevalent that the Gallup Organization conducted a poll that revealed “One in six Americans say they have had financial information—such as their bank or credit card numbers—stolen.”6 Think about it for a moment: if you lose your wallet or purse, what is also lost? Lost are our child’s photos, insurance card, and probably their Social Security card or number.

  The statistics are of great concern, but they do not paint the entire picture. When times are hard, parents do things they will later regret, such as borrowing their child’s identity. Most parental and family identity theft does not get reported; therefore, as bad as the statistics may be, they are not capturing all that is happening. Society is starting to understand identity theft, and efforts to educate the public are developing. Statistics show, however, that even with the push commercial companies and federal government agencies have made toward identity theft protection, child identity theft is on the rise, untouched by their efforts. This leads us to ask why thieves are targeting children.

  Question #3: Why do thieves target children?

  KSL TV 5 of Salt Lake City published a story on April 11, 2011, titled “Protecting Kids against ID Theft a Grim Reality.”7 In this article, a representative of the Utah Attorney General’s Office was quoted as saying, “We’re seeing at least 75 percent of our reports child identity theft related.” What they are trying to convey to both Utah and the rest of America is that identity theft against children is growing at an alarming rate, and 75 percent of all of their cases now involve children as victims. According to the Utah representative, “Child identity theft in Utah is significant and growing mainly because the state has a lot of kids.” The truth is that every state has a lot of children, and all are at risk. Utah is just one of the many states awakening to the issue.

  The Carnegie Mellon CyLab8 research previously referenced also shows that in fact children have a fifty-one times greater attack rate than do adults. So why are thieves targeting children at such a high rate? The answer is simple when you understand how the system of issuing credit works. In the world of credit issuance the “cleaner” your credit history record, the greater chance you will be approved for credit cards, get loans approved, or get a positive recommendation or endorsement for revolving credit. You are essentially approved because the credit reporting agencies have nothing negative in your credit file.

  The second factor has to do with discovering the fraud abuse. Most adults are technologically savvy, having hooked up with online banking and mobile phone, BlackBerry, or iPhone applications that allow them to check their bank accounts, directly access their credit card accounts, and view account statements. Even those adults without such technology look at their daily mail, read their monthly bank statements, and pay close attention to who calls their home phones.

  Parents routinely pay monthly home utility bills, phone bills, cable bills, and Internet access bills. Parents pay personal revolving credit bills for items such as furniture and appliances bought with monthly installment accounts. Children do not do any of the above-mentioned activities. They live the lives of children, which involves playing, learning, and developing.

  Children are financially innocent, which encompasses not paying monthly bills or worrying about jobs, income, and retirement. Unfortunately for child victims of identity theft, parents
can be caught in this same dangerous, cyclic mindset. Parents have the ability to uncover the crime of child identity theft just by proactively obtaining a copy of their child’s credit report. If a child has a credit report, that itself is a red flag.

  Parents love their children and seek to protect them as they grow. For eighteen years, parents work daily to guide their children into the world of “adulthood.” Along the way, though, parents believe their children should have no financial responsibilities, worries, or concerns. It is this mindset that keeps parents from deciphering that their child has been victimized.

  Criminals like children because they are free of debt, clear of any bad record, unsuspecting as a target, and unlikely to generate concern as long as the criminal diverts mailings away from the child’s real address. This crime is not usually discovered until the child becomes an adult and applies for their first credit card, fills out an employment application where a credit check is done, or applies for admission to a college.

  As to the riddle of why thieves target children, I say that the answer is found in another question. Would you rather steal the identity of an adult who will most likely see the signs of theft in their monthly bills and bank statements or the identity of a child who will not see the theft for up to eighteen years?

  Question #4: Isn’t identity theft something only rich people have to worry about?

  A common misconception has been that you have to be rich to be a target for identity thieves. A lot of people believe that only adults need to worry about identity theft. This is far from the truth, as fame, fortune, and age have very little to do with why child identity theft victims become the prime choice. It has to do more with the accessibility of information, the likelihood of being discovered in the criminal act, and the attractiveness of a target having a new, unused, or a good credit history.

  On May 11, 2011, I turned the television on to see a tearful teenager talking about how child identity theft criminals should go to jail. The show was NBC’s Today and they covered how this juvenile, and three others just like her, were thousands of dollars in debt with mortgages, auto loans, credit cards, utility bills, and even bankruptcies. All of these children were victims of child identity theft.

  The tearful girl, now a teen, owed $750,000 for homes and automobiles that thieves had purchased using her personal information. Most people watching the TV show most likely asked themselves how this could have happened. I knew what happened, as I was aggressively researching and studying crime trends, as well as compiling information in recent years on child identity theft. This crime, and my findings, will both astonish and horrify parents. I hope to provide preventive education to my readers to reduce the number of instances of child identity theft.

  As I watched this teenager cry, the reporter revealed that her theft had actually occurred back when she was only three years old. What was worse was that her information had been stolen, sold, resold, and then sold again. The teen couldn’t understand how something illegal could go unsolved.

  The cameras left the teen to zoom in on two male subjects working at jobs. The first thief was an auto-body repairman working just miles from the victim’s house. He was confronted in the parking lot of the auto-body shop, and he stated he did not want to talk about it. Supposedly, he would have his attorney contact the reporter; it never happened. As the TV interview continued, the teen was then joined by her father. Her father was visibly frustrated at how such an act of child identity theft could have happened, yet go unpunished.

  Unpunished it is, as the report continues to cover a story on a second suspect who used the identity of the same teenage victim at a “99-cents” store. The reporters encounter this thief as he gathers shopping carts outside the business. He claims not to know how credit reports show that he took out several auto loans using the teen victim’s Social Security number. In a move clearly to avoid the discussion, he only replied with “I don’t know” when he was asked to comment on why he victimized the child.

  Consider this: Why was the teen in the NBC story targeted? At the time of the theft, the victim was only three years old. She had no job, no money, and no wealth. From the perspective of law enforcement, she was targeted because she had something more valuable than parents understand: a good credit history.

  Criminals want a target that does not have a credit history filled with late bill payments, bankruptcy, foreclosure, or abuse. Thieves want their fraudulent application to be the first one received by the credit agency under the name and information submitted, thus ensuring issuance of credit and a clear path to maximum purchases. This good credit history translated for this victim into a successful scam where thieves were able to obtain credit cards, auto loans, and a home mortgage, all using her personal information.

  Question #5: Who steals a child’s identity?

  A wide range of thieves steal children’s identities. Individuals who target children for this crime include opportunists, scammers, terrorists, organized crime ring members, and profit-motivated criminals. Unfortunately, thieves who use children’s identities also include parents, relatives, and caregivers. The FTC states in their Identity Theft Survey Report9 that 16 percent of all victims know their thief. The breakdown of persons who commit this crime, according to the survey, is as follows: 6 percent family members, 2 percent coworkers, 8 percent friends, neighbors, or in-home employees, and 84 percent people unknown to the victim.

  Thieves who are strangers to the child just need to figure out the best way to access the information. The first question thieves usually ask themselves is, can I get the information without meeting the child face-to-face? While a face-to-face conversation with a child can yield the information thieves desire, such as name, date of birth, and address, it exposes the thief to potential discovery.

  The average parent reading this book about child identity theft for the first time might feel that obtaining a child’s identity information is difficult, as they are not “connected” to the world of finance or public records. This is far from the truth. As mentioned above, thieves who are strangers to the child will seek first to steal the information without contact, such as by stealing school records, medical office records, dental or orthodontist office records, recreational sports records, worship or church office records, or through home invasions while the family is away.

  If contact must be made with your child to steal their personal information, thieves will use one of two avenues. The first is to use another child to get the information. Children will tell other children almost anything; that is, unless parents teach their children not to release personal information. For example, a thief who has a child who is residing in the United States illegally, and wants to legalize them in the eyes of the law, or just needs to get them medical care using your child’s name, will simply have their child befriend your child to obtain their name, date of birth, and address.

  If your child does not have a Social Security number, a thief just needs to obtain or forge a birth certificate or other documents, such as an adoption decree; doctor, clinic, or hospital record; religious record (baptismal record); day care center or school record; or a school identification card. Once they have this information, the thief can submit it to the Social Security Administration to obtain a Social Security card. The Social Security card is issued and sent in your child’s name to the thief’s address. Once the Social Security card is received, they have all they need to gain access to credit, credit cards, and major purchases.

  The second avenue of personal contact involves obtaining a “trusted” position that gives a thief access to children’s information. Trusted positions are ones in which a child trusts the person because they are taught to go to him or her for help or questions. Some of these positions might include educators, ministers, first responders, coaches, and medical professionals.

  There are other trusted positions that are not as directly accessible to children’s information, but they still provide access to children. These jobs might be found at a sc
hool, medical provider, day care provider, sports provider, or youth organization. The positions might include, to name a few, a school janitor, school cafeteria worker, medical office worker, medical office cleaning crew, day care worker, day care cleaning crew, youth organization worker, such as a church youth leader, scout group leader, bus driver, or recreational sports leader.

  The potential list of who might steal a child’s identity is exhausting. It is limited only by your imagination. A parent’s job is to educate his or her child on the risks of releasing personal information, and to check credit once a year to ensure the child is not being victimized.

  Question #6: Is it true that children sometimes have their identities stolen by parents or other relatives?

  At the age of seven, Brandon watched as his mother was handcuffed and taken away by the local sheriff. Brandon’s mother was arrested for using Brandon’s identity to secure a job and evade her criminal record. How did she do it? It was quite simple; Brandon’s mother falsely used her son’s Social Security number when she filled out her job application. This fraud continued for almost a year. It wasn’t just a mother trying to support her family; she was intentionally seeking a position that involved access to sensitive billing information—a position similar to one that she used in the past to commit fraud and forgery, which resulted in her criminal record.

  —From Stolen Futures: A Snapshot on Child Identity Theft10

  Sadly enough, a significant number of child identity thefts are perpetrated by relatives; often parents. In this question, we will explain how and why relatives steal identities, and how a weak economy is leading some parents to make an ill-advised decision to “borrow” their child’s Social Security number to pay bills and other expenses. As you read further, I cover the emotional trauma the child experiences as the result of acts of identity theft by a relative, and its devastating effects.

  Those who are not familiar with the crime of child identity theft might ask why a parent would steal their own child’s information. Parents who consider themselves in an economic “bind” see little wrong with “borrowing” a child’s name to get through a temporary period of financial hardship. This usually begins with the parent rationalizing the crime by saying that it will be temporary and done in part to care for the child, such as regaining a power utility connection that has been cut off.