William G. Lako Jr.
With summer months approaching, your children may be spending more time online. Between multiplayer online games, social networking sites and the information stored on their mobile devices, your children may be more susceptible to identity theft. It is alarming to find your identity has been stolen, but imagine discovering your child has a mortgage, three credit cards and an auto loan when he completes the Free Application for Federal Student Aid at the age of 17. Identity thieves target children because the theft can go undetected for years before the child uses his Social Security number to apply for a driver’s license, a job or credit. Warning signs of a child’s identity theft include receiving calls from collection agencies, bills from service providers you have never done business with, or offers for credit or bank services in your child’s name. Adults are, generally, accustomed to receiving unsolicited credit card offers in the mail, but it may be a sign when your 2-year-old receives a balance transfer offer. You may discover your child’s identity has been compromised when you apply for government benefits, or file a tax return, and you are denied because your child’s Social Security number is already in use. If you suspect or want to verify if your child’s identity has been stolen, start by checking your child’s credit report. The credit reporting bureaus have different procedures for checking a minor’s credit, depending on the age of the child. Ask that the credit bureau perform a manual Social Security number search. New credit files are established frequently as young adults apply for credit. A first-time credit application rarely sets off an alarm. Credit bureaus verify a Social Security number is valid, but do not check the name and date of birth assigned to it. Because a child’s Social Security number has no credit history, a thief can link a stolen number to a different name and birthday; thus, the thief creates a false record. Since a standard credit report searches for a match of the name, date of birth and the Social Security number, a theft could go undetected. You may consider a ChildScan Report from AllClearID.com or a similar paid service that is specifically designed for a child. Such services will search for use of your child’s Social Security number in employment records, criminal records and medical accounts, in addition to a credit report. If you find your child’s identity has been compromised, you’ll need to alert the credit reporting agencies and place fraud alerts on your child’s credit file. You should file a report with the Federal Trade Commission and your local police department. You may also need to contact the Social Security Administration and the Internal Revenue Service. It is important to protect your child’s Social Security number by being acutely aware of who asks for your child’s Social Security number as a form of identification. You should ask how they plan to use it. Schools, doctors’ offices, day care centers or after school programs often ask for the information. Unless it is absolutely necessary, ask that they use another identifier. As your children get older, teach them the importance of protecting personal information, including any registrations they may complete online.William G. Lako, Jr., CFP®, is an Executive in Residence at Kennesaw State University’s Coles College of Business and a principal at Henssler Financial. Mr. Lako is a CERTIFIED FINANCIAL PLANNER™ professional.