Child identity theft occurs when someone uses a child’s personal information — such as their Social Security number — to fraudulently open financial accounts, obtain services, or commit fraud. Since kids don’t typically have credit reports, the issue can fly under the radar. Here’s what families need to know.
Picture this: your child worked hard their entire life, always played by the rules, earned good grades in school, and has been accepted to the college of their choice. It should be a time for celebration.
But, when your child applies for student loans, she is denied. It’s only then that you realize she’s a victim of identity theft that’s gone undetected for years.
This scenario may sound like a nightmare, but for some families, it is a reality. Fortunately, there are things families can do to help kids stay safe. Read on to learn more.
What is child identity theft?
Child identity theft happens when a criminal takes a child’s personal information and uses it to get services or benefits in their name or to commit fraud. For example, identity thieves may use a child’s Social Security number to open a financial account for themselves.
Children — including teenagers — generally have unblemished credit, making them ideal targets for scammers. And because children don’t typically receive bank statements, credit card bills, or even credit reports, it may take years for the issue to be discovered.
Often, parents don’t realize a child’s identity has been stolen until the child has difficulty applying for student loans, or purchasing their first car or cell phone plan.
When child identity theft goes undetected, it can impact a child’s credit scores and tax records for years to come. In some cases, this can delay the achievement of important milestones, like leasing a first apartment or obtaining a student loan to pay for college.
This can also have a negative financial impact on the whole family. Javelin Strategy & Research found that child identity theft costs an average of $1,128 per household in 2022.
How common is child identity theft?
Child identity theft statistics may surprise you. Javelin found that one in 80 children have their identities stolen annually — and 67% of households with child victims of identity fraud personally knew the person who stole their information, often a family member or friend.
Age is a factor too. The same Javelin findings show an increasing number of very young children becoming identity theft victims.
How does child identity theft occur?
Wondering how criminals get kids’ information in the first place?
You’ve probably been asked to provide your child’s personal information — including their Social Security number and date of birth — on all sorts of forms, including school records, summer camp applications, and medical forms.
Exploiting records like these is one way fraudsters could find (and steal) your child’s personally identifiable information (PII).
Data breaches are also a factor. In fact, Javelin found that 1.7 million children had their personal information exposed in a data breach in 2022.
Familial fraud — where personal information is used inappropriately by a parent, extended family member, or sibling — is another all too common way for a child’s information to be stolen. Given this, it’s smart to think carefully before sharing your child’s sensitive details with anyone, even a family member.
Tips to protect your child from identity theft
Children who spend unsupervised time online may be at greater risk for identity theft. Scammers have been known to try and trick kids into sharing personal information over email, on social media, or on fraudulent phishing websites.
So, paying attention to your child’s accounts and online activity is key.
Keep any shared devices like computers and tablets in a public space in your home. Check to see which websites your child visits and which apps they use.
Make sure that you understand what information is collected from your young children. The Children’s Online Privacy Protection Act (COPPA) requires that sites or services geared toward users under the age of 13 must send parents a plain-language consent notification before data are collected, so stay alert to these communications.
Be smart about your own online activity, too. Sharing children’s special moments and milestones with friends and family on social media may inadvertently disclose their personally identifiable information (PII) and can expose your child to future risks.
Before you share anything online, consider if the information could make your child vulnerable to fraud later on.
Finally, take care when completing forms for school and extracurricular activities. In some cases, the sensitive information that’s requested is not actually required. Don’t be afraid to question why certain details are needed, or to leave fields blank when you’re being asked to reveal more of your child’s information than seems necessary.
How to check for child identity theft
We recommend parents stay alert to these signs of possible fraud:
Your child receives mail from financial institutions about accounts you don’t recognize
Your child tries to open an account, but is denied because of their credit activity
Your child has a credit report with unfamiliar activity
It’s worth noting that minors don’t typically have credit reports. When they do, it usually means they’re either an authorized user on a parent’s financial account, or they are a victim of identity theft. Here’s how to check if your child has a credit report with each of the three major credit bureaus:
If your search does yield credit reports for your child, carefully review the documents for any irregularities. If you see activity you don’t recognize, report it to the credit bureaus immediately.
Steps you should take if your child’s identity is stolen
If your child is experiencing identity theft, what should you do next?
If you’re remediating the issue yourself, you can start by visiting the Federal Trade Commission’s (FTC) official page on child identity theft for guidance on how to address the situation. Here are a few notable highlights:
Send a letter to each credit bureau requesting they remove all accounts, inquiries, and collection notices associated with your child’s name or personal information
Explain to Equifax, TransUnion, and Experian that the victim is a minor, and include a copy of the Uniform Minor’s Status Declaration in your requests
Place a fraud alert, and consider requesting a credit freeze
Contact businesses where your child’s information may have been misused and explain the situation
Report the crime and create an official Identity Theft Report
Update your files with important information, like the times and dates you make contact with companies
Save copies of any correspondence you send to credit bureaus or other companies
Use an identity protection service
Fortunately, if you’re an Allstate Identity Protection member, you don’t have to manage child identity protection alone. Our team of experts will be here to help you until the issue you’re experiencing is resolved.
In addition, our monitoring tools can help you keep tabs on kids online, so you can protect what matters most.
Watch Allstate Identity Protection in action to learn more about how we can help.