Child Identity Theft: Risks, Prevention, and Consequences

Lyndon Seitz
Dolores Bernal
September 22, 2023

In the realm of modern-day threats, one insidious crime has emerged as an unsettling reminder of vulnerability, specifically targeting those who should be shielded from harm: our children. 

Picture the devastating moment when a young adult, brimming with hope for their future or aiming to secure a college loan, is confronted with a chilling reality—tarnished credit, suffocating debts, and shattered dreams. 

Or parents in disbelief as they receive credit card bills bearing the name of their unsuspecting child

What happened? Child identity theft

And fixing the damage can be an uphill battle.

What is Child Identity Theft?

grayscale photography of a girl facing at the back

Image by Alexa

In most respects, it’s exactly the same as any other identity theft, except that the victim is a minor

This often leaves the victim unaware that they are being taken advantage of or that their identity has been stolen. Consequently, they may have limited control over their situation and fewer options for seeking help or resolving the issue.

Child identity theft is a major problem because it impacts a vulnerable population.

How Prevalent Is It?

More prevalent than most of us would like, and unfortunately, we don’t have a lot of data on the issue because the victims might not report the crime right away – if ever.  

It is estimated that about 1.25 million children yearly, about 1 in 50, are affected by identity theft. It is also suspected that children may be more likely to experience identity theft than adults.

Why Is It So Prevalent?

It’s an opportunity, for the most part. 

A child cannot so easily defend themselves from this type of problem.

In the case of adult victims, criminals often face concerns such as fraud alerts, vigilant victims, or other obstacles that increase the risk of getting caught. However, when targeting children, perpetrators find a disturbing advantage. Younger victims lack the awareness to detect suspicious activities or comprehend the significance of a credit score, let alone concern themselves with its impact.

Furthermore, the personal information of children is often entrusted to various institutions such as schools, summer camps, and child care centers. While these establishments prioritize the physical safety of children, the same level of emphasis on information security is not always maintained. Regrettably, a single data breach can expose the sensitive data of numerous young individuals, highlighting the vulnerability of their personal information.

Then there’s the issue of easy access to a child’s personal information for those most likely to commit the crime.

Who Performs Child Identity Theft?

Computer hacker and cyber crime

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Who would do such a thing? 

The idea might pop up of an online predator lurking to steal financial information from unsuspecting targets or a hacker hoping to sell the school system’s worth of data to the highest bidder and then commit mass identity theft.

Something like this guy.

And they exist, for sure. If the information’s there, someone can take it. However, a matter that’s a bit more concerning regarding child identity theft is that random scammers and hackers online are not the issue. 

Children typically do not engage in in-depth discussions about financial matters while navigating the online world. In fact, they may not even be fully aware of the concept of personal finance and its various implications. Consequently, children are unlikely to become targets of fake job scams or fall victim to such online predators. However, this does not mean that there are no lurking dangers to be concerned about. Instead, other threats demand our attention in safeguarding the online experiences of children.

Most Perpetrators Know the Victim

One of the most unsettling aspects of child identity theft is that the perpetrator is often someone familiar to the victim, possibly even a caregiver.

When we think about it, this unfortunate reality follows a disturbing logic. Naturally, individuals wouldn’t suspect foul play, making it easier for the perpetrator to evade detection. Moreover, depending on the victim’s age, they may not yet grasp the concept of credit or fully comprehend the implications of identity theft.

And even if the child suspects something is wrong, the perpetrator can likely lie or explain away the suspicion, telling the victim not to tell anyone else about it in the process.

Creditors Don’t Always Check the Age

The first question you might ask yourself is, “Why would someone allow a child to have a credit card like that? Who approved this? How did a six-year-old get a car loan?

Creditors often prioritize checking essential information and credit scores when evaluating credit applications rather than verifying the applicant’s age. Their primary concern is determining the potential profitability of extending credit. Whether the applicant is a child or an adult is often considered secondary information.

There are reasons behind this approach. Regulatory rules and ethical guidelines ensure that individuals of different ages are not subject to discriminatory interest rates. However, while individuals who are not legally old enough to enter into a contract can be excluded, as previously mentioned, this requirement may not always be thoroughly enforced, and instances of identity modification can further complicate the verification process.

Prevention Tips

As a parent, taking proactive steps to prevent child identity theft is crucial. 

While it’s impossible to eliminate all risks completely, following the tips below can significantly reduce the likelihood of falling victim:

  • Try to minimize the presence of your child online as much as possible. Your child will likely thank you for the privacy later.
  • Teach your child the importance of online safety as well as the importance of keeping some information secret. Some things even relatives and family friends don’t need to know about.
  • Invest in an identity theft protection service such as Aura. Look for a service with a family plan or family protection built in. Such a service should monitor your child’s identity and information and let you know if something happens.
  • Be proactive in searching for identity theft clues. If mail comes in your child’s name and it looks like a bill, take a minute to investigate it.
  • Keep documents in a safe place. A fireproof lockbox is an excellent tool for this. The child’s passport, social security card, birth certificate, and like documents can be kept safely there.
  • If a family member or friend you know might be tempted to commit identity theft for whatever reason, don’t give them any access to your child’s information. 

Signs a Child Is a Victim of Identity Theft

  • You are starting to get mail in their name, such as bills, requests for money, further credit offers, etc.
  • Your child of college age can’t get a loan.
  • Your child has a credit report.
  • Your child receives an excessive amount of offers for pre-approved credit cards.
  • Calls for your child come in from collection agencies.
  • When you file for taxes with your child as a dependant, you get a notice saying your child is already listed as a dependant on someone else’s taxes. 

The Consequences of Child Identity Theft

What’s the worst that could happen? Quite a bit.

  • Someone’s credit and credit score are linked to practically everything someone can do financially. Your child is no exception, even if they aren’t using their credit so much.
  • They will likely have difficulties acquiring student loans until the situation is resolved, and given the timely nature of the school year and education, that can mean a huge delay which can be devastating.
  • They may also have difficulties getting a car loan, even a modest one.
  • If exceptionally poorly managed, your child might have debts, or you will need to pay to resolve this.
  • Even in a best-case scenario, resolving it can be costly and timely.

The best way to avoid the above is to do everything you can to avoid child identity theft in the first place. If that’s not possible, acting as quickly as possible minimizes the damage.

What Should a Victim’s Parents Do?

Cheerful mom hugging happy kids while they watching movie or video on laptop at home

Image by pch.vector

When you find out your child is a victim of identity theft, it can be enraging. However, you must keep a cool head throughout the process to minimize and reverse the damage, find the source, and stop anything like it from happening again.

Follow these steps if your child is a victim of identity theft – in the order you find most appropriate given the situation.

1. Collect Evidence and Information

You are now dealing with a crime related to your child. Even if you are not dealing with the police or other government authorities on this matter (though you likely should), you will contact other institutions and talk to them about the issue.

And the more details you have, the better.

When learning about identity theft, don’t delete anything unless its existence poses a further risk to your child.

This is especially true if you have evidence directly linking the theft to the perpetrator.

2. Order a Credit Freeze

It might be tough to find the culprit first, so one of the first goals should be minimizing the damage. In some cases, you won’t be able to find the culprit. That means a credit freeze is in order for your child.

While most people know that a credit freeze and protections are available for adults, not many know that the same options are available for children. You can start the process by following the instructions in this piece.

3. Try to Find the Source of the Problem

While addressing child identity theft may require uncomfortable conversations and potentially confrontational actions, it is essential to confront the issue head-on. In many cases, it may be necessary to sever contact with the identity thief, a decision you may already be inclined to make.

If the identity thief happens to be your spouse, finding yourself in such a distressing situation is undoubtedly challenging. However, it is vital to prioritize your child’s best interests and well-being above all else. Taking the necessary steps to protect your child from further harm should be your primary focus, as seeking legal advice if needed, and exploring avenues to ensure their safety and security.

Whoever the culprit is, they aren’t going to stop just because you ask politely. More likely than not, you’ll need to set up boundaries and take action.

If it wasn’t someone close to your child, try to understand where the information breach came from. Did a daycare or school not handle information properly? Did another service or company fail to protect information? You probably won’t want to work with them anymore.

4. Contact Authorities

You don’t always have to contact the authorities, but depending on how deep it runs and how far along the identity theft is, you may need to if you want your child’s credit restored.

The exact authorities may differ depending on your location and the situation. However, you should contact the following:

  • Get in touch with the local police. You can go to them in person or call their non-emergency line. You will want to get a police report.
  • Depending on how the identity theft happened, you will want to report fraud to the FTC, which you can do here.
  • Contact any creditors, banks, businesses, etc., for which the identity thief used your child’s identity. Cancel everything, do not claim responsibility for any debts, and make a note of responses. 

5. Close Relevant Accounts

If an account with a credit card company or other type of creditor has been opened, or other online accounts have been opened, then you should close them on your child’s behalf. You might have already done this as part of contacting the companies involved.

The exact process for closing an account can vary by the company, but you should be able to do so with a call to customer service, with perhaps a Google search to help you out.

6. Set Up Protection Measures

Once identity theft has happened or a breach has been found, you must stay on the lookout for your child, likely for as long as they remain a child. 

However, you need not do it alone. Aura is an excellent option for identity theft protection services. It offers insurance should anything happen, will regularly monitor accounts for you and your family, and you will get regular reports and alerts should something happen.

This is no reason to neglect general cybersecurity on your and your child’s devices. No service or security can help if you let malware on a device. You must teach yourself and your child the best information security habits so private information isn’t given away.

What If You Are the Victim?

Not all parents have their children’s best interests at heart; rather, their interests are placed way above their children’s.

And since most child identity theft is done by someone who knows the victim, it stands to reason that the perpetrator is often a parent. And you might be the victim reading this now wondering what to do.

Each situation is different, but for starters:

  • If you know the perpetrator do not confront them, at least not right away. You likely don’t have the power to confront them and change anything without help.
  • You may need to contact the authorities and file a report. This can mean criminal charges against one or both of your parents, but it is what may be necessary to restore your credit. Remember, they willingly did do this to you.
  • If you are younger, you will want to talk to another trusted adult about it. You may not have the means to protect yourself without outside help. Have someone act on your behalf if needed. Some professionals specialize in this sort of thing.
  • If you are 16 or 17, you can request or remove credit freezes. Don’t tell anyone that you’re doing this until after the fact, if at all.
  • If you are older, contact the credit bureaus and explain the situation. This will not be their first time dealing with something like this.
  • Place your personal and physical safety as a priority. If someone is willing to financially abuse you like this (it is financial abuse), they might be willing to hurt you in other ways. You might, unfortunately, already know this.

Again, this will not be an easy go of it, and it is a shame you have to deal with this in the first place. But your life is not over, and you will become stronger and more secure from the ordeal. Take things one step at a time and ask for help when and where you need it.

Conclusion – Your Child Is At Risk

Child identity theft is an unfortunately common crime that often remains undetected for prolonged periods. Complicating matters further is the fact that the perpetrators are often linked to the child in some way, creating a complex situation.

However, despite the complexity, your course of action remains simple: prioritize the protection of your child, their identity, and their financial future.

By following the steps outlined above, both for prevention and response, you can mitigate the risk of child identity theft. While ideally, you never have to face such a situation, being prepared with a plan can significantly ease the experience for both you and your child. Educate your family about good information security practices, consider utilizing a service like Aura to enhance protection, and remain cautious of individuals who may exploit your child.

Once you have implemented these protective measures, you can find solace in knowing that you have taken significant steps to safeguard your child from the perils of identity theft. With everything in place, you can enjoy greater peace of mind, knowing that the risk of child identity theft is minimized.