Identity theft is growing at the rate of an epidemic. Consumers whose identities are compromised can face financial loss and years of frustrating bureaucratic red tape as they try to straighten out their credit histories.
When the victims are children, the consequences can be even more damaging. And increasingly, children are becoming targets of identity thieves.
Of the more than 255,000 identity theft complaints received in 2005 by the Federal Trade Commission, five percent involved people 18 or younger, an increase from three percent in 2003.
According to a recent study by the Identity Theft Resource Center, based in San Diego, the theft usually takes place early in the childs life. The researchers found that, in 54 percent of the cases, the theft took place before the child was six years old.
The study also found that, while parents or other relatives were the most likely perpetrators, other identity thieves increasingly target children for one simple reason. Its easy to do, and to get away with for long periods of time before discovery.
Most parents today apply for Social Security numbers for their children soon after birth. That single piece of information is all the identity thief needs to establish lines of credit.
Because the child has no other credit history, its unlikely the victim would find out until they become adults, and need to borrow money. They then may discover they have accumulated a mountain of unpaid debt without ever knowing it.
There are a number of things parents can do to prevent their children from becoming identity theft victims:
• Use extreme caution when revealing your child's Social Security number, or providing a photocopy of a birth certificate. Before complying with any request, first question whether it is absolutely necessary. Dont hesitate to ask the party requesting the information exactly how it will be stored and who, if anybody, besides them will have access to the information.
• Dont let anyone in your family carry a Social Security card. Any card with your Social Security number should be left at home, or have the number blacked out.
• Be on the lookout for business mail arriving in your child's name. Pre-approved credit offers should be closely examined, as should any account statements. A collection notice shouldnt regarded as a mistake, but a cause for alarm.
• When children are old enough to use the Internet, stress the need for privacy and password integrity. Discourage the use of a mothers maiden name as a password..
• Perform checks of your child's credit report when you check your own. Federal law gives consumers access to one free credit report every twelve months from each of the three major credit bureaus - Experian, Equifax, and TransUnion.