Identity theft is on the rise—the Federal Trade Commission receives a growing number of complaints each year, and financial criminals keep devising new and increasingly sophisticated fraud strategies.
Child identity theft is among the most heinous tactics. It targets the most vulnerable and defenseless members of our society—our children—and it’s harder to detect and trace than typical impersonation, so victims often may not know their identity is being misused.
It’s natural to be concerned about your child’s privacy and protecting their identity, and educating yourself is the first step to keeping them safe. This guide will provide you with the most important information on child identity theft, including:
- How this crime works
- How to know if your child’s identity has been compromised and what to do about it
- What steps to take to prevent identity theft from occurring in the first place
What Is Child Identity Theft?
Child identity theft is a form of crime where the perpetrator uses a child’s private information to commit different types of fraud:
- Obtaining fraudulent credit with one or multiple lenders
- Applying for government benefits in the child’s name
- Filing fraudulent tax returns to obtain a refund
- Making large credit purchases like vehicles
One in 50 U.S. children falls victim to identity fraud annually, many of whom suffer severe consequences. As children’s identities often aren’t monitored, fraud can go unnoticed for years—especially due to the complex mechanisms involved in it.
How Does Child Identity Theft Occur?
Most cases of child identity theft involve synthetic identities. There are two common ways they can be created:
- Identity manipulation
- Identity compilation
The following table explains how both strategies work:
|Type||How It Works|
|Identity manipulation||The fraudster alters the child’s existing information, such as their name, address, and birth date|
|Identity compilation||The child’s personal information is combined with fake details for the creation of a new identity|
Identity compilation is the most common tactic and is the one people typically refer to when talking about synthetic identity fraud. While various pieces of a child’s personal information can be used, their Social Security number (SSN) is usually the main target. There are two main reasons for this:
- Minors don’t use their SSNs to obtain credit, and they typically don’t have an existing credit profile. A “clean” SSN makes it easier for criminals to obtain fraudulent loans
- Children born after June 2011 have randomized SSNs, which aren’t tied to their birthplace and birth date like they used to be. This makes the number harder to trace back to its legitimate owner
While most children are at risk of synthetic identity fraud, those in foster care are especially vulnerable. Many of them don’t have a permanent address, which makes it even easier for a fraudster to stay under the radar. Foster children’s information is also harder to protect because it’s often exchanged between numerous adults and agencies.
How To Check for Identity Theft of a Minor
There are two ways to check if your child’s identity may have been compromised:
- Look out for common signs of identity theft
- Contact credit bureaus to see if your child has a report
Child Identity Theft Red Flags
Many parents don’t realize their child’s identity has been stolen. Depending on what the fraudster does with the new identity, you may notice unusual activity that could point to identity theft. The most notable signs include the following:
- Notices from the IRS—Your child is likely claimed on your tax return, so they don’t file their own. Any communication from the IRS addressing them could be a sign that someone has used their identity for tax fraud
- Denial of loans or government benefits—If your child gets rejected for benefits, student aid, or loans they’re eligible for, it might mean that someone has already obtained them using the child’s SSN
- Pre-approved credit card offers—Minors can’t obtain credit cards independently; you can either co-sign one when they become a legal adult or add a child as an authorized user of your card. If this isn’t the case, and your child still received an offer, a fraudster may have tried to obtain a card in their name
Checking if Your Child Has a Credit Profile
As minors can’t obtain loans, they can’t build a credit history or have a credit profile. The only exceptions are if your child is an authorized user of your credit card or if you have previously placed a security freeze on their card.
If your child has a credit report, and you haven’t added them as an authorized user or placed a security freeze on their card, it’s a tell-tale sign that someone has used their identity to obtain fraudulent loans.
You can check if this is the case by reaching out to one of the three major consumer credit bureaus:
If any credit bureau confirms your child has a report, you need to react immediately to mitigate the damage and prevent further fraudulent activity.
What To Do if a Child’s Identity Is Stolen
By the time you notice your child’s identity is compromised, the scammer may have already committed various crimes connected to it. If the fraudster has obtained loans in your child’s name, there’s a high chance their credit profile will be tarnished. This will make it hard for your child to get approved for legitimate loans and obtain financial aid in the future.
You might need to do quite some damage control to stop the issue from escalating further. The best steps to take include the following:
- Freezing your child’s credit profile—A credit freeze makes your child’s credit profile inaccessible to new lenders, preventing the fraudster from obtaining additional loans in their name. Note that you need to place the freeze with each credit bureau separately
- Placing a fraud alert—A fraud alert on your child’s credit report warns lenders that the child may have fallen victim to identity theft, encouraging them to take additional steps to verify their identity. It’s enough to request the alert with one credit bureau, as they must notify the others
- Closing any fraudulent accounts—Your child’s credit report will show all credit products obtained in their name. With this information, you can contact the affected lenders and request the closure of fraudulent accounts
- Helping your child rebuild their credit—If your child is an adult and has a low credit score as a result of identity theft, you should help them get back on track to minimize the risk of loan denials in the future
Dealing with the consequences of identity theft can be stressful and complicated. That’s why you should be proactive about this issue and take the necessary measures to avoid it altogether.
How To Prevent Child Identity Theft
Financial criminals can obtain children’s information from various sources. They often buy it on the Dark Web or scam children directly through social media, forums, and other outlets. Physical theft of private information is also a significant concern, so you have to protect your child’s identity online and offline.
The good news is that there are many ways you can do it, most notably:
- Keep your child’s documents safe
- Teach them not to reveal sensitive information to anyone
- Be wary of forms requesting your child’s SSN
- Oversee your child’s online activity
- Consider credit profile monitoring
Protect Your Child’s Documents
Your child’s sensitive documents should never be in plain sight. You need to safeguard everything that contains their personally identifiable information (PII), including the following:
- Birth certificate
- Social Security card
- Medical records
Keep all these documents hidden, preferably in a secure location. Investing in a safe might be a good idea, but make sure not to reveal the combination to anyone who doesn’t need it. As much as nobody likes to think about break-ins, it’s crucial to be prepared for the worst and ensure important information is stored safely.
Emphasize the Importance of Protecting Private Information
While you understand the dangers of revealing sensitive information, your child might not. You need to teach them not to share their PII with anyone. This doesn’t only include strangers—Javelin’s identity fraud study shows that in 67% of child identity theft cases, the perpetrator is someone the family knows.
Make sure your child is aware that virtually nobody needs to know their SSN, including most organizations. It’s crucial they understand this because scammers use elaborate tactics to make it seem like the child must urgently reveal their information.
For example, there’s a specific type of phishing attack targeting children. Your child may receive a spoof email asking for their SSN or other information. An unassuming child might fall for the scam and endanger their identity.
Tell your child they have to inform you whenever someone asks for their PII—you’ll certainly know better if the request is legitimate.
Beware of Unnecessary Requests for Your Child’s SSN on Different Forms
This point is related to the above, with only one important distinction—you, too, have to know who needs your child’s SSN and what for. You may receive many forms from school or different clubs your child is a part of, some of which unnecessarily request their SSN.
There’s usually no malicious intent behind this, but the risk is too high to leave anything to chance. If you’re asked to fill in your child’s SSN, ask the following question:
- Is the number necessary, and why?
- Can a different identifier be used instead?
- Is it possible to only use the last four digits?
Monitor Your Child’s Online Activity
While you should always give your child privacy, it’s important to at least have some idea of their online behavior. This includes the following:
- Knowing what social media accounts they have
- Understanding how and where they purchase online
- Being familiar with online communities they’re a part of
Having this information is important for teaching your child about the risks they might run into and the proper protective measures. In today’s world, online fraud is more common than physical information theft, so your child should be vigilant.
Using parental controls to monitor and limit your child’s online activity might be a wise move if they’re still young. You can spot any risky behavior on time so that you can take the necessary action and educate your child on protecting their privacy online.
Take Advantage of Credit Profile Monitoring Services
Monitoring your child’s credit profile is an effective way to reduce the risk of identity theft. It lets you detect unusual activity connected to your child’s personal information and stop it from turning into severe fraud.
The problem is, credit monitoring services for your children and family can cost hundreds of dollars per year. This can add up to thousands of dollars to monitor your children’s credit from the time they are born until they become adults.
Some people decide to proactively freeze their children’s credit profiles instead, believing it’s enough to prevent the opening of fraudulent loans in their name. While this tactic is somewhat effective, even credit bureaus point out that a freeze can’t prevent identity theft.
That’s why you might want to consider professional credit monitoring services. If you want your child’s information monitored by experts, FreeKick can help.
Establish, Monitor, and Build Your Child’s Credit Profile With FreeKick
Powered by Austin Capital Bank, FreeKick combines a Federal Deposit Insurance Corporation-insured (FDIC-insured) deposit account and additional services to monitor your child’s profile while improving their creditworthiness on autopilot.
Identity monitoring and protection is available for children aged 0–25. You can create an account and rest assured knowing your child’s credit profile is under close supervision at all times. This significantly reduces the risk of identity theft, giving you and your child peace of mind.
Which Security Measures Does FreeKick Use? (Coming Soon)
FreeKick protects minors’ sensitive information with various services, explained in the following table:
|Service||How It Works|
|Social Security Number Tracing||Detects true-name and synthetic identity fraud by tracking all names, aliases, and addresses associated with a minor’s SSN. You also get a mapped view of the identities connected to it|
|CyberAgent Dark Web monitoring||Using advanced surveillance technology, FreeKick monitors internet activity associated with the potential trading of your child’s sensitive information|
|Full-service ID restoration||If your child’s identity is jeopardized or stolen, a certified restoration specialist will dispute fraudulent activity and work on their behalf to restore it. Ancillary restoration services are backed by FreeKick’s $1 million insurance|
|Neighborhood sex offender monitoring||Tracks registered sex offenders in your vicinity to alert you if any register under a different name using your address|
As your child grows up and becomes independent, you may find it harder to protect their identity, so FreeKick offers additional services tailored to them:
|Service||How It Works|
|Lost wallet monitoring||Protects credit cards, driver’s licenses, Social Security cards, and other documents. The service also includes a web-based interface for managing personal information and a specialist’s help in reissuing lost documents|
|Change of address monitoring||Reports any redirections of your child’s mail through the USPS|
|Payday loan monitoring||Gives you an alert if your child’s SSN is used to obtain payday loans|
|Court records monitoring||Searches court records to detect any unauthorized identity use|
Give Your Child a Head Start in Life With FreeKick’s Credit Building Services
FreeKick doesn’t only monitor your child’s credit profile—it also helps you build it so that they start their adulthood with a significant advantage. A strong credit profile can save your child over $200,000 throughout life!
The best part is, it all happens without ongoing action needed on your part—all you need to do is:
- Create a FreeKick account—Go to FreeKick.bank and choose a plan based on a one-time deposit
- Set It and Forget It—FreeKick automatically builds 12 months of credit history for your child through a $600 no-interest loan paid from the deposit. Nobody can access the loan as it’s purely for credit-building purposes, so there’s no risk
- Keep Growing—At the end of the 12-month term, you can renew the account for another 12 months or close it and get your deposit back
FreeKick will report your child’s credit history to credit bureaus if they’re a legal adult (18 and over in most states). The service also builds credit for minors, but they first need to activate reporting when they become legal adults, as credit bureaus don’t accept it for underage children.
You can choose from three plans based on the FDIC-insured deposit amount:
- Free—One-time deposit of $2,500
- $49/year—One-time deposit of $1,750
- $99/year—One-time deposit of $1,000
Despite the 12-month commitment, you can close the account at any point without penalties. Note that if you do it while the child is still a minor, no credit reporting can be done, and all monitoring services will cease immediately.
Safeguard your child’s credit profile and help them enjoy a more financially stable future—sign up for FreeKick.