Your child isn't exempt from identity theft. Here's How to Protect Your Family

Can Someone Steal Your Child's Identity? Here's How to Protect Your Family

As parents, our children's safety and well-being are always our top priority. We work hard to keep them safe in the physical world, but in today's digital age, protecting them online is just as crucial.

Unfortunately, children are often more attractive targets than adults for scammers, cybercriminals, and identity thieves. The latest research from Javelin Strategy found that child identity theft affects around 1.25 million American children each year with families losing nearly $1 billion. This is a growing problem that parents can't afford to ignore.

In this guide, we'll explain what child identity theft is, how it happens, and how to tell if a scammer is using your child's identity. We'll also provide 10 actionable steps you can take to protect your child from identity theft now and in the future.

What is Child Identity Theft?

Child identity theft happens when someone fraudulently uses the identity of a minor for financial or personal gain. For example, scammers could use your child's Social Security number (SSN) and name to apply for credit cards, take out loans, receive government benefits, or commit tax fraud - all in your child's name.

Children are highly desirable targets for identity theft because they're essentially "blank slates" for criminals. Children don't have credit scores, credit card statements, or any credit history at all. Scammers can start small by building a legitimate credit history for your child and then gradually increase their fraudulent activities over time.

How Does Child Identity Theft Happen?

Here's how child identity theft happens:

1. Scammers steal or access your child's personally identifiable information (PII). This could include their SSN, name, home address, email address, and more. Unfortunately, this information is easy to find online due to the number of recent data breaches. Stolen SSNs sell for as little as $2 on the Dark Web. In many cases, the perpetrator is someone the child knows - such as a family member, community member, or teacher.

2. Next, they apply for credit, take out loans, or open bank accounts in your child's name. It's illegal for anyone under age 16 to apply for a loan, but very few companies verify ages with government documentation. Scammers could also use your child's identity to apply for jobs, file for government benefits, or commit tax fraud.

3. The scammers disappear without paying their debts - leaving you to pick up the pieces. Child identity theft often goes unnoticed for years and is only discovered when your child applies for their own credit (such as a first credit card or student loans).

The impact of child identity theft is hard to measure. Children end up with destroyed credit scores or even get denied financial aid and employment. On average, child identity theft costs American families an average of $372 out-of-pocket on top of any fraudulent charges you need to pay back.

How to Tell If Your Child's Identity Has Been Stolen

Here are some warning signs that your child's identity may have been stolen:

1. Your child receives bills or credit offers in the mail in their name. If your child starts receiving pre-approved credit card offers or other financial "junk mail" addressed to them, it's a red flag that their identity may have been used to apply for credit.

2. You start to receive calls or letters from collections agencies asking about your child. Debt collection notices or bills addressed to your child may signify that a credit lender is trying to recover unpaid debts that someone has accrued in your child's name.

3. Your child is denied credit, student loans, or government aid. If your child is denied benefits because their Social Security number has already been used, it could mean someone else has applied for benefits, such as unemployment, with your child's personally identifying information.

4. Your child receives IRS letters claiming unpaid taxes. If IRS letters addressed to your child appear in your mailbox, it's a clear indicator that someone has used your child's Social Security number at a job.

5. You claim your child as a dependent on your tax return but are informed that they already filed for taxes.

6. Your child already has a credit file. If scammers are using your child's identity, it will show up in their credit file. You can request a free copy of your child's credit report at AnnualCreditReport.com. Credit reporting agencies don't generate reports for minors, so if there's already a report under your child's name, this is an obvious red flag.

7. You receive inappropriate junk mail addressed to your child. If age-inappropriate magazines, flyers, or junk mail show up, it could be a sign that someone is using your child's identity to sign up for adult services.

If you notice any of these warning signs of child identity theft, you need to act quickly to protect your child's identity and credit.