To identity thieves, children are attractive targets for identity theft. They know that a child will not be applying for credit cards or taking out loans for years, which creates a large window of opportunity for abuse.
To make child targets more attractive, thieves also know parents don’t expect their child to have a credit file, and as a result, don’t request to check it for possible illegal activity. Young victims might not feel the pinch until they apply for a credit card, a home mortgage, or car or student loans.
But States are finally pushing back.
Lawmakers in Wisconsin recently approved legislation known as the Child Credit Protection Act. The law is designed to make sure that a child’s personal information cannot be used to open a credit account until he or she is at least 16 years old.
Under the new legislation, parents in Wisconsin can pay a $10 fee to each of the three main nationwide credit bureaus – Equifax, Trans Union and Experian – to create a credit record for a child. The agencies will place a security freeze on the account automatically to prevent anyone from opening credit accounts in the child’s name. Once the child turns 16, parents can request that the account be unlocked.
Seven other states that have passed similar laws, and several other states are considering legislation.
Recent studies have revealed the scope of identity theft crimes on minors.
A 2011 Carnegie Mellon University study, based on a review of more the credit files of more than 40,000 children, found that 10.2 percent of children under the age of 18 had their Social Security number compromised. That percentage is dramatically higher than the 0.2 percent rate for adults in the study.
Indeed, Social Security numbers are the most common form of child identity theft, Sadly, trusted friends or family members frequently commit the fraud, and the crimes often take a year to detect and resolve.
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