We are experiencing phenomenal growth in child identity theft. The Federal Trade Commission (FTC), which tracks such things, labels child identity theft as the fastest growing type of ID theft. Parents must become more aware.
To many parents, the whole concept of stealing someone else's "identity, especially a child's identity," sounds like something you would run across in a science fiction novel. How can you steal someone's identity? The sad truth is stealing an identity, and especially a child's identity is all too easy — child's play you might even say.
A little over a year ago, the FTC held the first national symposium on child identity theft apply entitled "Stolen Futures." It heard from a wide range of experts, and some young victims of child identity theft. The symposium was presented with the results of a study done by Carnegie Mellon's CyLab which examined the records of some 42,000 children and found that over 10 percent had their Social Security numbers being used by someone else. In a surprising number of cases a young person's stolen identity was being used by multiple crooks.
Government statistics always lag several calendar years behind the present. The Justice Department's Bureau of Justice Statistics reports that 11.7 million young persons, representing 5 percent of all Americans age 16 or older, were victims of identity theft during a two-year period ending in 2008. The FTC itself reported that in 2006, there were more than 10,000 identity theft complaints filed involving victims who were under the age of 18. This is up from 6,500 cases in 2003. Based on the rate of increase, the FTC expects to receive upwards of 18,000 formal complaints of child identity theft in 2012.
Steven Toporoff, an attorney with the FTC's Division of Privacy and Identity Protection told the symposium that child identity theft is a bigger problem than most people realize, and said a lack of data makes it hard to raise awareness about the swiftly growing crime.
"It's completely under-reported because parents in many instances have no suspicion that their child's identity has been taken. Children certainly don't know," Toporoff says. "While we don't know how prevalent it is, it can be devastating when it happens to a particular family."
While we were developing Identity Guard, we decided to check out our own children's situations. One of our colleagues made the startling discovery that his young daughter owned a boat and a car, and had multiple credit cards. In fact two different people were using his daughter's identity.
What is particularly insidious about child identity theft is the fact it can go on for years without the victim or the victim's parents having any indication that something untoward has happened or is happening. There can be some warning signs, perhaps your 7-year old daughter starts getting credit applications from department or specialty stores. Most 7-year-olds do not need an account like that.
More likely the first time most parents learn their child's identity has been stolen is when the child attempts their first credit transaction — perhaps purchasing a cell phone or setting up an online account in their own name, applying for college financial aid, or getting that first job, one which requires a background check, credit report and drug test — as almost all do these days.
In the near future we'll examine various aspects of child identity theft including who steals a child identity and why. The facts might surprise you.