We here at Intersections (creator of Identity Guard®), along with our friends at ITAC, the Identity Theft Assistance Center, have just released a new study on child identity theft done by Javelin Strategy & Research. The "2012 Child Identity Fraud Survey Report" takes a deep look into the crime of child identity theft, identifying trends, and also exploring the long-term impact this crime can have on children and their families.
It's clear the crime of child identity theft is growing. Specifically, the report found that one in 40 households surveyed had at least one child whose personal information had been compromised by identity criminals and that criminals frequently create synthetic identities to commit these crimes.
My colleague Steve Schwartz, President of Partner Services here at Intersections, commented, "In the past two years, we've seen the issue of child identity theft garner media and consumer attention, but there are many misunderstandings about this crime and more work needs to be done to educate consumers. Reputable studies like this one can help the industry better understand the threats associated with child identity fraud, and in turn help educate families about how to help protect minors and recover from the crime, ensuring a healthy financial start upon reaching adulthood."
Specifically, the key findings of the study were:
- One in 40 Respondents Had a Child Who Was a Victim of ID Fraud.
According to the study's findings, the incident rate of child identity fraud among households with dependents under age 18 is 2.5 percent over the lifetime of the family, or one in 40. This number may be underreported due to the prevalence of family members who may be linked to the crime and would not admit to the fraud, as well as households where victims do not discover their childhood ID fraud until they reach age 18.
- Victimization Frequently Occurs Close to Home by Family or Friends.
Friendly fraud is to blame in many child ID theft cases, and the data shows that 27 percent of victims reported knowing the individual responsible for the crime.
- A Social Security Number Is the Top Compromised Identifier.
Consistent with industry experience, and like adult identity fraud, the study shows that Social Security numbers are the most commonly used piece of information by identity thieves targeting children. Fifty-six percent of victims reported theft or misuse of a child's SSN. Criminals actively seek children's Social Security numbers (SSNs) which can be used to commit financial fraud.
- "Synthetic Identities" Is the Most Common Method of Child ID Fraud.
The study shows that the most common way that criminals use a child's personal information is to combine a child's Social Security number with a different date of birth to create a "Synthetic ID" — a fabricated identity that can be used to commit fraud. Synthetic identities are very difficult to detect.
- Child Identity Fraud Is Difficult to Detect and Resolve.
The survey showed that these crimes took 334 days to detect and 44 hours to resolve, and 17 percent of children were victimized for a year or longer. These statistics indicate that child identity fraud is both difficult to detect, and difficult to resolve.
"This survey provides the first solid, verifiable statistics on the causes and consequences of child identity fraud," said ITAC President Anne Wallace. "The results will help ITAC and its government and nonprofit partners improve strategies to prevent and detect child identity fraud and assist victims recover from the crime."
In my next blog I'll look at some insights and recommendations that can be gleaned from the data collected by the study.