Your BBB® receives calls from people who have had their identities stolen.
While adults worry about having their financial data stolen, an increasing threat is your children. A child’s Social Security number can be used by identity thieves to apply for government benefits, open bank and credit card accounts, apply for a loan or utility service, or rent a place to live.
Equally disturbing is the fact that many identity thieves are the children’s own parents.
ID Analytics reports that more than half a million U.S. identities of kids were stolen by their own parents.
Of the 783 data breaches reported by U.S. companies in 2014, over 42% were in the medical and health care industry. Many children are listed on their parents’ insurance policies.
The real issue is that there aren’t strict regulations on how companies protect user information.
Medical companies are not currently required to encrypt user data. This may change with the recent exposure of an estimated 25 million children’s SSNs and dates of birth. As it stands, companies smooth things over with customers by offering free credit-monitoring services for a year or two. Smart thieves wait at least a year or two before using stolen information in hopes that consumers and law enforcement will have lowered their guard. And remember: it can’t stop a thief from pursuing other popular avenues of ID theft, like using a stolen SSN to apply for a job, obtain medical services or fill out a fraudulent tax return.
One problem with data breaches is that you never quite know when hackers will use the information they’ve stolen. Even if your child was a minor when their data was compromised, encourage them to keep a close eye on their credit when they start a credit file as an adult. They can easily request a fraud alert, which requires lenders to verify your identity before extending new credit. An initial fraud alert (which is free) only lasts for 90 days but you can extend it for up to seven years (also for free). An extended fraud alert comes with other perks, too: you can get two free credit reports within 12 months from each of the major credit bureaus, and they have to take your name off marketing lists for pre-screened credit offers for five years, unless you ask them to put your name back on the list.
Educate your 16-year-olds to never post a photo of their driver’s license on Facebook. If a school, a doctor’s office or any other service requests your child’s SSN, don’t give it up without first asking exactly why it’s needed. You should ask, how are you housing my information and how are you protecting it?
Be wary of any service that charges you for things you can already do for free without their help — like setting up a credit freeze, adding fraud alerts and getting a free credit report.
You can track your own credit reports for free today using AnnualCreditReport.com.
Simple Steps Parents Can Take:
Only poke around your child’s credit file if you have good reason to suspect fraud. Did you get a letter from a company alerting you that your child’s information may have been compromised in a data breach? Is your child suddenly getting a bunch of credit card offers in the mail; two clues there may be something to worry about. Otherwise, it can actually be detrimental to continuously request your child’s credit report from credit bureaus. Experts recommend you start by filling out a child credit inquiry with one of the three major bureaus. The answer you want is that there is no credit file under your child’s name, which is how it should be. If a credit file turns up, it’s time to start digging to see if it may be the result of fraudulent activity; request credit histories for your child from the other two major bureaus. If fraud is found, the bureaus will work with you to clean things up. Request a credit freeze. A credit freeze ensures no one can create a new line of credit on an existing credit file, while still allowing you to use existing credit accounts without a problem. For a child who likely doesn’t already have a credit file to freeze, credit bureaus have to first create a credit file for them and then freeze it.
Depending on your state, it may be free, or cost up to $10. This is much cheaper than what most credit monitoring services cost). It’s an effective way to ensure no new credit lines are opened under your child’s name.
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While the BBB endeavors to provide accurate information to the public, changes in the law, facts or circumstances may have occurred since the foregoing was posted. The BBB recommends doing independent research and consulting professional advisors concerning a particular situation.