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Sen. Clinton Targets Child Identity Theft

By Martin H. Bosworth
ConsumerAffairs.com

October 31, 2006

Identity thieves are increasingly turning to pilfering the information of young children in order to pull off their scams, Clinton said. The dangerous tactic uses children's personal data to open up new credit accounts and rack up thousands in debt.

Clinton said she knew of a case where a thief used a seven-year-old's identity to purchase a $40,000 houseboat.

The nonprofit Identity Theft Resource Center estimates that as many as 500,000 American children may have been victimized by fraud or identity theft in 2005. The Federal Trade Commission says the number is closer to 400,000.

Children and young adults are prime targets for identity thieves as they may have unblemished credit records, or no credit records at all.

Common tactics include parents using childrens' Social Security numbers to open up new credit accounts, and "dumpster diving" thieves stealing credit offers mistakenly sent to children too young to make use of them.

Victims often remain ignorant of their identities being misused until they start receiving collection notices for unpaid bills on accounts they don't recognize, as well as pre-approved credit offers.

Under her legislation, credit card companies would have to verify the age of any new applicant for credit before approving or denying the claim. Companies that failed to verify applicants' ages would be fined.

The new legislation is part of Clinton's "Debit and Check Card Consumer Protection Act of 2006." The bill would extend the anti-fraud protections for credit cards to debit and check cards, including the limitation of liability for fraudulent purchases to $50.

Under current liability law, consumers whose debit cards are used fraudulently can be liable for as much as $500 if the fraud isn't reported in two business days or less. Many banks and credit unions extend zero-liability protection to debit card users, but the practice varies according to the bank or credit union in question.

Debit card users would also have the right to "charge back" purchases made with their cards if they were dissatisfied with the merchandise under Clinton's bill.

What You Can Do

• Keep your child's Social Security card and information locked up in a safe or strongbox. Do not carry it or share it with anyone outside the household.

• Ask to have your child's Social Security number obscured or removed from insurance or medical documents.

• Don't give your child's Social Security number to them until they're old enough to understand what it is and why they need it.

• Check both yours and your child's credit reports regularly for any signs of fraud or unidentified accounts.

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