Identity theft targeting children’s clean credit can go undetected for years

Always Investigating

Identity theft is top of mind the more we hear about data breaches at major retailers, institutions, even one of the largest credit bureaus.

But you should be watching out to protect your child’s identity and credit as well.

We often think only adults or people with credit cards and loans are at risk for identity theft, but kids can be victims too. In fact, they’re the ideal target.

The unprecedented Equifax breach has everyone thinking about identity theft if you’ve ever opened a credit account.

Brandee Faria, a local attorney taking class-action on behalf of Hawaii victims of Equifax said, “Children are involved in the compromise for sure.”

These are children who’ve never yet applied for a credit card or a loan but someone impersonating them may have.

“The fact that the age does not track with the social security number is not problematic at all,” Faria said. “There are no creditors alerting 6-year-olds about any problems at all until they’re 18. They go out to buy a car, and are told, ‘Oh look, you’ve got terrible credit, because you’ve ran up all this debt and never paid.’ What the hackers do is they don’t use your address, so you don’t know about anything.”

For the latest breach, adults are told by Equifax to check their social security numbers to see if thieves got their information.

Always Investigating asked, “As parents are checking their own social security numbers, should they be typing in the child’s just to see?”

“They absolutely should,” Faria said, “and when you sit here and think about it statistically speaking, it’s definitely going to be affecting children. I’ve found locally it’s about 70 percent of people affected by it, and that’s just adults, but the numbers don’t add up. Children have to be involved.”

Potential child identity theft didn’t start there and is unlikely to end there either. Nationally one out of 40 households has been impacted by identity theft affecting minors in the household.

We asked Hawaii prosecutors about it, and if they see many cases of child identity theft in Hawaii.

“Absolutely,” said Honolulu deputy prosecuting attorney Chris Van Marter. “Part of the problem is children, like everyone else, have a social security number. Children have a clean credit report. The problem is when they’re a victim, you don’t find out about it for years and years, so the problems for the child go undetected, and when it finally is detected, it creates a very serious problems for that child.”

The perpetrator is not always a stranger or distant hackers who sell stolen social security numbers by the tens of thousands.

“About a quarter of the cases that we see involving children, the perpetrator turns out to be a parent or someone known to the child,” Van Marter said.

Stephen Levins, head of Hawaii’s Office of Consumer Protection, explains usual motives: “Family members, their own credit may be terrible, so they’ll use the child’s identity to get what they want to do. It may be out of an act of desperation or it may be another member of the family who’s just trying to take advantage of the situation.”

We wanted to know, can you block people from opening credit under a minor’s ID? Come Jan. 1, 2018, you can.

“We recently joined 25 or so other states in which parents now or guardians can create a record with the credit reporting agency regarding the minor,” Levins said, referring to Act 92, which was signed into law this summer and goes into effect at the start of 2018. “What that does is you create a record and then you can freeze the record. Previously, a minor has no record, so there’s nothing to freeze.”

Right now, you can find out if your kid’s identity has already been tapped. First, call the credit bureaus directly and ask. If a child’s identity has already been victimized and credit has already been obtained from that, here’s what experts say to do next:

“The first thing they should do is get a copy of the credit report,” Levins said, “then contact everyone who was listed as a creditor on there, contact them directly, put a fraud alert, put a freeze on.”

Make sure to report it to the police. The police report not only helps when dealing with creditors to resolve the unauthorized charges, but police can also get prosecutors involved, Van Marter said.

Keiki ID Theft Resources

Federal Trade Commission: Child identity theft signs and warnings

Office of Consumer Protection: Identity theft resources

Credit bureaus

Call your county police to file a report if your child is a victim.

Authorities also advise parents to take an inventory and treat your child’s personally identifiable information as a valuable asset.

“They also need to make sure their children’s personal information is guarded,” Van Marter said. “Limit access to that information. Limit where the information is stored, and educate their children to the dangers of disseminating that information.”

Levins agrees. “For instance, if someone asks you for your social security number, you don’t need to provide it to them unless it’s absolutely necessary,” he said. “If a sports club or even a school is asking for a social security number, you really should be asking, what do you need this for?”

Kids themselves can be especially cautious online, in social media and on cellular phones.

“I know everybody likes to put their birth date out there. People on Facebook, a lot put their birthday out there, but that’s another identifying marker for people,” Levins said.

If older kids do get the privilege of a debit or credit card account or are allowed to make purchases online, use a multi-step process that goes beyond just a username and password sign-in.

“I think it’s very important that they use two-factor authentication involving financial accounts, email accounts, e-commerce accounts,” Van Marter said. “The perpetrator won’t have access to the child’s phone or the pin to the child’s phone, so that is one of the best security features that children can take advantage of right now to protect themselves.”

If thieves are caught, there are serious consequences. If losses exceed $20,000, the perpetrator is looking at a mandatory 20-year prison term.

But there are hurdles unique to child-victim crimes.

“We have seen cases involving minor children, but the problem is those cases don’t come to law enforcement’s attention for many years,” Van Marter said. “That sometimes poses problems for statute of limitations issues and we may not be able to prosecute.”

Always Investigating asked, do prosecutors think there should be changes in the statute of limitations law for child ID theft?

“That’s something the legislature should consider,” Van Marter said. “As it is right now, we have a total of three years from the point that the crime is discovered. If we’re beyond the three years and the crime involves some sort of deception, like identity theft usually does, we can extend that statute of limitations for another six years, but even that may not allow us to prosecute when the identity theft occurred when the child was very young.”

We’ll follow up with lawmakers if they take steps toward statute-of-limitations changes in the next session.

We’ll also follow up with Equifax, which has not yet responded to our questions asking if they’ve yet estimated how many social security numbers associated with the recent breach are affiliated with minors under 18.

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