Millions of U.S. children have had their identities stolen in only the last few years. If you’ve read all the gloomy statistics—or perhaps even had first-hand experience with this issue—you might want to know why children are ideal targets for identity theft.
There are several reasons child identity theft has become so prevalent. This article highlights them so that you can take the necessary steps and protect your child from such a severe crime. You’ll discover the best methods for safeguarding your child’s information and learn why a premium identity protection service might be a wise idea.
How Does Child Identity Theft Occur?
Financial criminals have gone beyond impersonation and now resort to various strategies for defrauding financial and government institutions. Instead of pretending to be someone else, they create an entirely new identity by stealing a child’s personally identifiable information (PII) and combining it with made-up data.
This is known as synthetic identity fraud, which has been tied to numerous types of criminal activity, including the following:
- Healthcare fraud
- Financial and tax fraud
- Drug and human trafficking
Still, the most common use of synthetic identities involves credit fraud. The scammer uses a child’s information to obtain loans in their name and disappear without repaying it. Such fraud can go on for quite a while, as synthetic identities are difficult to trace—which is precisely why children’s information is so desirable to fraudsters.
Why Financial Criminals Target Children
Scammers steal children’s identities for three main reasons:
- Children don’t have a credit history
- They have randomized Social Security numbers (SSNs)
- Their identities aren’t closely monitored
Children Don’t Use Their Identities To Obtain Credit
The vast majority of minors don’t have a credit history because they don’t have access to financial products like loans and credit cards. The only exception is if you’ve added a child as an authorized user of your card, in which case they get a credit profile and inherit your credit history. And even in that case, your credit history is removed from their profile as soon as you remove them as an authorized user.
In all other cases, scammers see a child’s identity as a blank slate. There are no red flags to warn the credit bureau or the lender as the child’s SSN hasn’t been used to obtain credit, which enables credit fraud.
Children Born After 2011 Have Randomized SSNs
Up until June 2011, SSNs contained three parts:
- Area number
- Group number
- Serial number
If your child was born after June 25, 2011, their SSN doesn’t have any geographical significance or date of issuance attributes, as this is when the Social Security Administration (SSA) decided to start randomizing SSNs.
As a result, it’s more difficult to connect the SSN to its legitimate owner, which is a significant loophole that fraudsters exploit. It’s also the reason synthetic identity fraud can go unnoticed for quite a long time.
Children Aren’t Subject to as Much Monitoring as Adults
Your identity is under the supervision of several institutions, like the government and banks. Whenever you use your SSN to apply for any government-backed initiatives or loans, there’s a record of it. This isn’t the case with children, as their identities aren’t used for such purposes.
A lack of monitoring makes it easier for a criminal to steal and manipulate a child’s personal information and create a new identity out of it. Such theft can happen in various ways, especially since children are none the wiser about the dangers of sharing their PII.
How Fraudsters Steal Children’s Information
There are three broad ways someone can get ahold of your child’s PII:
- Theft of physical documents
- Data breaches
- Online theft or manipulation
The first scenario happens as a result of a child’s sensitive documents being frequently shared among various parties. Foster children are a good example, as their information changes many hands during the adoption process.
Data breaches are the most common way fraudsters get ahold of someone’s PII. For example, through a cyber attack on a hospital or health care provider. However, due to the increased use of online services and social media, online theft has also become prevalent. Over the years, numerous malicious strategies have been developed to extract sensitive information from children. The following table explains the most common ones:
|Strategy||How It Works|
|Phishing||The scammer sends a spoof email or message impersonating a legitimate organization and asking the child for sensitive information|
|Financial aid scams||The child receives a financial aid offer and is asked to apply using their sensitive information. This type of fraud often targets high school or college students|
|Catfishing/grooming||The fraudster develops an online relationship with the child to build their trust and then asks the child for their private information|
According to Javelin’s whitepaper on child identity fraud, different types of fraud have resulted in over 900,000 children falling victim to this crime in 2022 alone. Luckily, there are ways to ensure your child doesn’t become a part of these statistics.
Tips for Protecting Your Child From Identity Theft
You shouldn’t wait for signs of fraud to take action, as it might be too late by the time you notice them. It’s better to have a foresighted approach to identity protection and safeguard your child’s personal information.
Some effective ways to avoid identity theft include:
- Protecting your child’s SSN—Don’t reveal your child’s SSN unless the requester can prove the legitimate need for it. Use your own information instead of the child’s whenever possible, and teach your child not to fill out sensitive forms without your oversight
- Teaching your child about online dangers—You can’t monitor everything your child does online, so you must teach them to protect themselves from fraudsters. Let them know they should never reveal their PII to anyone, regardless of how urgent the request might seem
- Freezing your child’s credit profile—Putting a security freeze on a child’s credit profile prevents new lenders from accessing it, so the scammer can’t open credit accounts in the child’s name. Note that this method still doesn’t fully prevent identity theft—it only offers protection in the context of credit accounts
Doing all of the above yourself can be a challenging task, as you need to stay on the constant lookout for danger. You’d also need to go through complex and time-consuming procedures. For example, freezing your child’s credit report involves separate requests with all three credit bureaus:
Credit profile monitoring is a safer and more convenient alternative. If you want your child’s credit profile to be watched over by experts, FreeKick can help.
FreeKick—Credit Profile Monitoring for Children Ages 14–25
FreeKick—powered by Austin Capital Bank—is a combination of a Federal Deposit Insurance Corporation-insured (FDIC-insured) deposit account and additional services that monitors your child’s profile while helping them build a strong one.
By having your child’s credit profile monitored, you can keep it free of errors or issues without effort. FreeKick’s team will ensure all the information is updated and accurate. More importantly, they’ll help safeguard your child’s sensitive information through various security measures.
How FreeKick Helps Protect Your Child’s Identity (Coming Soon)
Besides monitoring your child’s credit profile, FreeKick keeps track of all names, addresses, and aliases connected to their SSN. This minimizes the chances of the number being used for malicious purposes, and any potential signs of true-name or synthetic identity fraud can be detected timely.
As fraudsters often purchase children’s information on the Dark Web, FreeKick uses the CyberAgent surveillance system to monitor all internet activity related to its trading. Knowing that PII can also be extracted from the child directly, it also offers ID restoration services if your child’s identity is compromised.
In this case, you’d have comprehensive support from a certified restoration specialist. They’d work on your child’s behalf to:
- Investigate alerts
- Dispute fraudulent activity
- Restore the child’s identity to its original form
The above services wouldn’t expose you to any costs, as FreeKick covers them with a $1 million ID theft insurance.
Finally, FreeKick’s neighborhood sex offender monitoring keeps track of registered offenders in your area. If an offender registers under a different name using your address, you’ll get a report and a detailed report.
If your child is 18 and over (19 and over in Alabama), they’re eligible for additional services that safeguard their information:
- Lost wallet protection
- Change of address monitoring
- Payday loan monitoring
- Court records monitoring
Invest in Your Child’s Future With FreeKick’s Credit Building Services
FreeKick offers automated credit building that can help your child enter adulthood with well-established credit. Starting the credit journey early in life gives your child a significant advantage and improves their overall financial stability.
You can enjoy these benefits without having to directly involve yourself in the process—all you need to do is:
- Create a FreeKick Account—Go to FreeKick.bank and choose a plan that suits you based on a one-time deposit
- Set It and Forget It—Once the account is active, FreeKick will automatically build 12 months of credit history for your child. This is done through a no-interest installment loan paid from the deposit that gets reported to the credit bureau
- Keep Growing—After the 12-month term expires, you can renew the account for another 12 months to keep improving your child’s creditworthiness
FreeKick will start reporting their credit history if your child is a legal adult. If they’re a minor, they have to activate reporting when they become one because the credit bureaus don’t allow credit reporting for underage children.
As for the aforementioned deposit, it influences the plan you’ll sign up for, as explained in the following table:
|FDIC-Insured Deposit Amount||Cost|
You can close your FreeKick account at any point, and the deposit will be returned to your account within seven days of closure. Still, if you do it while the child is a minor, no credit can be reported on their behalf, and all monitoring services will cease immediately.
Ensure your child’s credit profile is in good hands and help them become a financially stable adult—sign up for FreeKick.