Most parents worry about the typical risks children face in a day. They worry about sending them on a school bus, and then being in the care of another person, sometimes a stranger, for most of the day. They worry about their child crossing the street on the way home. While all of these are concerns parents have been dealing with for decades, there is a new threat that may not be so obvious – child identity theft.
Child identity theft most often occurs when a person obtains a child’s Social Security Number, and then creates an identity to match that number. They then use that identity to take out loans, credit cards, and other types of debt. While the child is still growing, and years away from worrying about financial concerns, their credit is being ruined.
It is a growing concern within the country. According to a study conducted by Javelin Strategy and Research, over 1,000,000 children were victims of identity theft in the year 2017 alone. Most of those children, two-thirds, were under the age of eight.
Unfortunately for parents, there is also little that can be done to stop it. Fewer than half, just 29, states currently allow parents to order a credit freeze if a credit card is opened in their child’s name. What may be even scarier is that in over 60 percent of cases, the identity theft is done by someone that knows the child such as a family friend, or even their own parents.
“While it is true that more than half of the identity theft child identity cases involve the parents or someone close to the child, there is often no unlawful intent,” says Whitney Polson of Polson & Polson, P.C. “Sometimes they simply want to set their child up further down the road, and start building their credit right from the start. Some parents want to start them off on the right foot and start saving for school or adulthood. When an entirely new identity has not been built, no one can say it was a matter of fraud.”
For example, a parent may open a credit card in their 16-year-old child’s name. While the parent may hold the card, they may still allow the child to use it to pay for purchases, repay the amount and build their credit. They may then mistakenly use that credit card while shopping, and would technically be guilty of identity theft, even if it was an honest mistake.
This is certainly a complex issue, and one that parents need to be aware of. Not only because one small mistake could lead to them being charged with a crime, but also because while sometimes the use of a child’s credit is sometimes innocent, that is unfortunately not always the case.
