published Sunday, March 24th, 2013

Frauding the cradle: Identity theft a growing problem for children

BY THE NUMBERS

$21 billion: Estimated cost of all U.S. identity theft incidents in 2012

$1.5 million: Amount of fraud perpetrated over a decade against a 19-year-old girl discovered in a 2012 survey by AllClear ID

35-51: How many times more likely children are than adults to be identity theft victims

$1,727: Average value of fraud in child identity theft cases

334: Time in days to detect the average case of child identity theft

56: Percentage of child identity theft cases involving a stolen Social Security number

27: Percentage of reported child identity theft cases that were perpetrated by a family member or friend

44: Average time in hours to resolve cases of child identity theft

12: Average time to resolve cases of adult identity theft

5: Age in months of the youngest victim discovered in the CyLab report

Sources: Javelin Strategy & Research 2013 Identity Fraud Report, AllClear ID Child Identity Theft Report 2012, Carnegie-Mellon CyLab, IdentityTheftAssistance.org, Robert Chappell

PREVENTION AND DETECTION

Author and child identity theft expert Robert Chappell offers the following suggestions for preventing your child's identity from being stolen or detecting any problems. Many of these tips also apply to parents.

• Never place Social Security numbers on school, medical or insurance forms. Ask if you can substitute the final four digits of the number instead, and find out how any forms you submit will be stored and to whom they will be disclosed.

• Keep critical papers bearing personal information at home in a locked container, not in your wallet or purse. If you must dispose of documents with this information, cross-shred (horizontally and vertically) to prevent their reconstruction.

• Teach your children -- and yourself -- to practice discretion on social media and avoid sharing dates of birth or Social Security numbers on your profile.

• To provide adequate time to address any errors, visit www.annualcreditreport.com and ask for a free manual search of your child's credit report about the time they turn 16. A manual search will check for files relating to their name and Social Security number and could detect discrepancies a regular check would miss. Depending on the crediting bureau, this may require parents to submit several identifying documents.

• Monitor mail for any increase in or the sudden appearance of credit card offers to your child, especially if you haven't recently opened a savings account in their name.

DAMAGE CONTROL

If your child's identity is stolen, the process of repairing the damage often can be lengthy and frustrating. Here are the first few steps parents should take immediately to get the ball rolling:

1. Keep a detailed journal with contact information for all correspondences you have with creditors, crediting bureaus and other agencies.

2. Send a letter to the three nationwide crediting agencies (Equifax, Experian and TransUnion) requesting they remove accounts, inquiries and collection notices associated with your child's name and personal information. Include a copy of the Uniform Minor's Declaration Status (available at consumer.ftc.gov).

3. Contact creditors where accounts have been opened and request that they be closed. Follow up that request in writing.

4. File an identity theft report with the Federal Trade Commission and print off an identity theft affidavit to gain certain protections and rights with debt collectors or companies and to help file an extended fraud alert on the credit report.

5. Take the printed FTC complaint to local law enforcement to generate a police report of the incident. In many cases, this report is required by the crediting bureaus before they will take further action.

6. Ask one of the agencies to place a fraud alert on your child's credit report. That agency will share the request with the other two. Consider requesting a 90-day, renewable credit freeze to prevent further activity on the account.

Sources: FTC, various internet sites, Robert Chappell

For many 18-year-olds, receiving the first credit card offer is a rite of passage, a promise of access to adult financial resources accompanied by flattering statements of pre-approval.

Even as her friends' mailboxes in Ringgold were being clogged by bulky envelopes with rectangular bulges, however, Brittany Marston's remained mysteriously empty.

Growing up, her grandmother taught her to be wary of the dangers of abusing credit, so she wasn't in a hurry to apply for one. Still, she remembers, the absence of any offers was worrisome.

"I was curious as to why I wasn't getting them since I knew I hadn't done anything to mess my credit up," recalls Marston, now 22. "My grandmother suggested that I get my credit report, so I did and saw that there was a Capital One card in my name."

Confused, she called to inquire about the account, which had been maxed out and had fees that amounted to more than double the $400 credit limit. Capital One informed her that she had been making charges at gas stations, grocery stores and banks in Alabama.

Even worse, Marston says, she knew who was to blame, and the person was related to her.

"Having [a family member] do that to you is really not a great experience," she says.

Just days into adulthood, the credit score Marston had been taught to so carefully safeguard was in shambles. Like many victims of identity theft, restoring her financial good name was a frustrating experience and, because she was a minor, took far longer to resolve.

A Growing Problem

About 500,000 identity theft cases are reported annually involving victims under the age of 18, says Robert Chappell, veteran Virginia law enforcement agent and author of "Child Identity Theft: What Every Parent Needs to Know."

As with adults, uses of a stolen identity vary widely with kids, from opening lines of credit and applying for loans to escaping criminal persecution and obtaining illegal employment. The difference for minors is that violations often remain undetected for much longer than for adults -- up to 61/2 times longer, according to the 2012 Child Identity Fraud Report by the Identity Theft Assistance Center.

"There are very few signs, and parents don't know to look for the signs that are there," Chappell says.

Because of the ease of evading detection -- sometimes for years -- recent studies of childhood identity theft have found that minors are 35 to 51 times more likely than adults to be the victims of identity fraud. The ITAC report estimated that 2.5 percent of American households with minors will experience child identity fraud before children turn 18.

A compromised Social Security number was the most common inroad to stealing a child's identity, according to the report. Chappell says these numbers are acquired in a variety of ways, from network/computer hacking and purse snatchings to contractors illegally accessing records at schools, doctors' offices or insurance providers.

Experts say the problem is getting worse.

According to a 2012 report by identity-theft protection firm AllClear ID, more than 10 percent of the 27,000 children whose credit reports the company scanned had evidence of someone fraudulently using a child's Social Security number. The same report found that possible cases involving victims under the age of 5 increased by 105 percent between 2011 and 2012.

One of the main contributing factors to children being targets of identity thieves is that parents don't know what information to protect, Chappell says.

"Parents need to know one basic fact: A child's information is worth something," he explains. "Until they become 18 and above or get out in the work force, we think that information isn't of value, but criminals have figured out that, yes, in fact, it is."

Leech Your Children Well

As in Marston's case, the guilty party often is a relative. Chappell says that's true in more than one-quarter of child identity theft incidents.

In addition to the usual complications resulting from identity theft, the complex relationship between victim and perpetrator means the damage done is twofold. As a result, Chappell says, cases of child identity theft by relatives are probably under reported.

"You leave the child with a feeling of violation," Chappell says. "Not only have they been victimized ..., but they have the inability of cleaning it up without following through with the police agency, who will often want to prosecute. Often, they don't end up doing anything at all."

Many times, the violation starts when a relative faces a mountain of overdue bills and uses their child's Social Security number to restore a vital service they see as being in the family's best interest. The situation often snowballs, however, and Chappell says relatives deserve little sympathy for taking that route.

"In all likelihood, the parent can't pay the new bills either, and the child's credit is ruined," he says. "It is far from a victimless crime."

After her daughter gave them up to the foster care system in 2005, Ooltewah resident Debra Fisher, 58, adopted all four of her grandchildren. As they turned 18, Fisher says she discovered their mother had used each of their Social Security numbers to open fraudulent accounts.

There were magazine subscriptions, unpaid electric bills and cable bills. Some charges were years old and had been sent to collection agencies. One granddaughter's Social Security number had also been stolen by a second party in an unrelated case and was being used to claim dependency for Food Stamps.

Fisher says she faced obstacle after obstacle to correct the situation.

Because the offenses occurred in a different county, obtaining a police report was next to impossible, even though credit bureaus often require one, she says. The bureaus also balked at her requests because the names and Social Security numbers didn't match; nor would the agencies respond to the three letters she wrote seeking a resolution.

"I felt absolutely impotent," Fisher says. "It was very frustrating because no matter who you turned to ... no one would do anything."

Eventually, Fisher says, she had to bluff her daughter into believing she was facing jail time to convince her to call the crediting bureaus and claim the mistake was a clerical error. Fisher has not filed criminal charges and has not said she plans to do so.

A Hard Lesson

In Marston's case, all turned out well, but it took three years of writing letters, making calls and eventually threatening to involve an attorney before she convinced the credit bureaus to erase the black marks on her report.

In the meantime, she has steadily built up her credit by charging her wedding ceremony to a David's Bridal account, then paying it off in increments. Her grandmother, who warned her to avoid credit cards, helped out as well by naming her as an authorized user on a Sears card.

Even with a credit score that now is in the 700s, however, Marston says she will never forget the lessons she learned from her experience.

"It's most definitely changing my approach to raising my kid," she says of her 2-year-old son Corvyn. "Once he's 18, I will definitely be checking his credit score. It's hard to have to live on edge like this."

about Casey Phillips...

Casey Phillips has worked as a features reporter in the Life department since May 2007. He writes about entertainment, young adults, technology and people of interest. Casey hails from Knoxville and earned a bachelor of science degree in journalism and a bachelor of arts in German. He previously worked as the features editor for Sidelines at Middle Tennessee State University. Casey received the East Tennessee Society of Professional Journalists Award of Excellence for Reviewing/Criticism in ...

videos »         

photos »         

e-edition »

advertisement
advertisement

Find a Business

400 East 11th St., Chattanooga, TN 37403
General Information (423) 756-6900
Copyright, Permissions, Terms & Conditions, Privacy Policy, Ethics policy - Copyright ©2014, Chattanooga Publishing Company, Inc. All rights reserved.
This document may not be reprinted without the express written permission of Chattanooga Publishing Company, Inc.