I recently told you about a proposal by the Social Security Administration (SSA) to make it easier for parents of children who have had their identities stolen to obtain new Social Security numbers for those victims. Rather than go through the laborious process of trying to clean up a credit record or work record to eliminate the fraudulent information, logic would dictate the easiest way of solving the problem of a young person's who identity has been stolen is simply obtain a new SSN for the child and essentially to start over.
Up until now this process has difficult for many victims and the SSA recognizes this. "Despite our goal of limiting each person to a single SSN, we recognize that there are some situations where third-party misuse of an SSN may make it helpful to assign an individual a new SSN."
Under the change that is under consideration, the SSA would allow grant a new SSN to a child under 13 in the event the child's Social Security card was stolen in transit, the child's Social Security number was incorrectly disclosed through SSA's Death Master File, or a third party has misused the child's number.
The big problem in the past has been the requirement to present evidence of actual recent harm — not simply prospective harm — to the young person, which can be difficult to show for a child. Currently you have to show that the child has been denied credit or a loan or some other denial; not simply that the child has a bogus credit history that likely will cause such a future denial.
As required by law, the SSA has posted its proposed changes in the regulation and has asked for comments from the public. It has now received one from the staff of the Federal Trade Commission's Bureau of Consumer Protection — perhaps the federal agency with the most experience in child identity theft.
To start, the FTC expressed support for the SSA proposal and talked about the need for the change. But then the FTC staff recommended two modifications to the SSA proposal which the FTC believes will provide "further safeguards."
The SSA arbitrarily selected ages 13 and under to apply this relaxed standard to qualify for a new SSN. The FTC recommends that the age be increased to children age 17 and under. The FTC staff noted that many children who are victims of identity theft before age 13 may not know they have been victimized until they are older and applying for credit, or an apartment, or a student loan.
Secondly, the FTC staff recommends that language in the new policy allow reporting by parents, guardians, law enforcement and child welfare agencies as methods by which the SSA can receive notification that a child's Social Security number has been stolen.
Both of these changes being suggested by the FTC staff make good sense. More often than not, the way young people — or their parents — learn they have been victims is the first time they apply for credit. So raising the age to 17, or even 18, seems sensible. The SSA worries that some young people with legitimate bad credit will claim to be victims to get out from under by requesting new SSNs. That is why they picked age 13, but that appears to prevent those who need the new policy the most from taking advantage.
I'll keep you posted as the new regulation moves through the process.