SALT LAKE CITY — Identities are stolen from about 1 million American children each year. It’s the fastest-growing form of identity theft and may not be spotted until the victims are adults applying for a job, a loan or housing, according to Experian, one of the "big three" consumer credit reporting agencies.
The sooner ID theft is found, the easier it is to limit damage, says Michael Bruemmer, vice president of consumer protection at Experian, which recently announced it will let families do a single free scan to see if the Social Security numbers of their minor children are associated with a credit file, which could indicate identity theft and fraud. The other big consumer credit reporting agencies are Equifax and TransUnion.
The company on Aug. 20 also released its survey of 507 victims of child ID theft and 231 parents of children who were thus victimized. In 86 percent of cases, the theft centered on a stolen Social Security number.
One of the findings that might surprise people is how often the identity theft is a parent or other relative — one-third of the time, according to the report.
But it wouldn't surprise Axton Betz-Hamilton, an identity theft researcher and college assistant professor of consumer affairs at South Dakota State University who has been honored for her identity theft research. She is co-author of "The Young Adult's Guide to Identity Theft: A Step-by-Step Guide to Stopping Scammers."
Her interest came from personal experience. When she was 19, according to an interview with Marketwatch, she discovered that she'd been the victim of identity theft starting when she was 11 and someone used her Social Security number to establish credit.
She and her mom worked for years to try to untangle the mess, which had dented her credit score and caused various problems, including the need to dig up bigger deposits for utilities when she tried to get her own place. It always seemed like the thief was a step ahead, she lamented. And later, she learned that was true. After her mother died when Betz-Hamilton was in her early 30s, she and her dad discovered that her mom, who'd been "helping" her untangle the identity theft, was actually the thief.
Among the survey’s other key findings:
- Victims were on average 12 years old when their identity was stolen and, while some parents discovered the problem early, more than half found out themselves when they received a bill or applied for credit. In 45 percent of cases, the victims were 18 or older when they found out.
- In one-third of cases, the child knew the identity thief — sometimes a parent or other relative.
- Resolution may take years; in one-fourth of cases it takes a decade or more to clear things up.
- About 35 percent of victims said they needed professional mental health treatment for related stress, anxiety, anger or depression.
- The largest age category of victims, 44 percent, said their identity was stolen between ages 15 and 17.
- One in 12 victims were age 4 or younger.
The survey, conducted this summer, has an error rate of plus or minus 4 percent.
Identity thieves consider youngsters’ clean credit reports the mother lode because they can fabricate histories to meet their larcenous needs, according to officials who deal with fraud for Mountain America Credit Union in Utah.
"There’s no prior record in the credit file of that Social Security number. … There’s nothing to flag as being contradictory,” says Rob Woellhaf, vice president of fraud management.
"That first application for credit is key" and thieves can make information up, adds his colleague, Tony Rasmussen, Mountain America's vice president of financial education.
If parents aren't the perpetrators, they are the first line of defense, but they must be proactive, says Bruemmer. "If they're not monitoring for activity, there's no automatic process to alert them that credit has been applied for in a child's name."
Ounce of prevention
Nearly 60 percent of child ID theft victims said their credit report and credit score were damaged, according to the survey. More than half (52 percent) were denied credit because of the theft.
Bruemmer says Experian can also quickly scan the "dark web" for signs of identity theft. He describes it as a hidden portion of the internet that requires special credentials to get in. And it's not the good guys who go there; the dark web is a haven for people who want to buy and sell illegal drugs, prostitution, illicit IDs and more.
Preventing ID theft starts with being suspicious, says Bruemmer, who notes few requests for a child's Social Security number serve a valid purpose.
"Don't give out that Social Security number to the doctor's office, the dentist, the school or others," he says. "They don't need it."
He also tells parents to watch their children on social media, because kids inadvertently give out information that aids ID theft. A kid excited about getting a driver's license should NOT post a photo of it, for example.
Bruemmer, Rasmussen and Woellhaf say credit monitoring tools can be very helpful, though they usually cost a small fee. Monitoring automates a process so parents don't forget to look. If something is found, the service provides an alert. Such tools are widely available through the credit bureaus, financial institutions and other agencies.
Parents can also request annual credit reports from Equifax, Experian and TransUnion. Most experts advise consumers to alternate them, getting one every four months. The source for the official free report is annualcreditreport.com. Those with sound-alike names may be risky and won't be free.
Taking care to prevent ID theft is easier than undoing the harm, says Woellhaf. "Truly, the advantage of an ounce of prevention applies here."
The free, one-time child ID theft scan can be accessed at www.experian.com/childscan.
Experian is also sponsoring a Child Identity Theft Awareness Day Sept. 1 and has teamed with the ID Theft Resource Center, a nonprofit that helps people who have experienced ID theft.
The resource center can teach parents how to watch for signs of ID fraud. In addition to its website, a call center is open weekdays from 7 a.m. to 6 p.m. MST, at 1-888-400-5530.
Parents can also get a downloadable wallet card that outlines steps if an adult or child falls victim to identity theft.
It happened, now what?
Despite vigilance, identity theft can occur. When it happens, most people are flummoxed about what to do. Woellhaf says he'd start with the big credit bureaus. Notify one of fraud and it will notify the others.
He thinks it's also a good idea to file a police report "if they will accept the report, depending on the circumstances."
You should also notify your financial institutions, says Rasmussen. "Consumers who notify us of suspicious activities right away have helped everyone." It limits the amount of financial harm that can be done and increases likelihood the fraud can be stopped.
Some will also choose to freeze credit, a process that prevents use of one's Social Security number to obtain further credit or open new accounts. Each credit bureau offers instructions on getting that done — and on how to lift it to apply for credit or do a transaction that requires a credit check.
The federal government has a website dedicated to helping victims of ID fraud. Identitytheft.gov takes people through recovery steps. The Federal Trade Commission offers advice, too, as does the Consumer Financial Protection Bureau.
Rasmussen and Bruemmer note that consumer agencies, the credit bureaus, financial institutions and others offer help to figure out how to proceed once identity theft occurs.
Correction: A previous version provided an incorrect phone number for the the Identity Theft Resource Center. The correct number is 1-888-400-5530.