Why Fraudsters Want Your Child's Social Security Number

Children can be victims of identity theft and their information may be even more valuable to thieves. Learn how to detect and help prevent child ID theft.

Photo by Kevin Ku on Pexels

Data breaches and headlines about identity theft might lead you to be extra cautious with your private information. However, many parents don't realize how valuable their child's personal identification information can be for identity thieves.

Whether you're a new parent (congratulations!) or have teenagers in the house (good luck), keeping their information secure should also be a priority. And as children head back to school, you may want to think twice about what information you're sharing.

How Does Child Identity Theft Occur?

A 2018 child identity fraud study by Javelin Strategy and Research found that over a million children were the victims of identity fraud in 2017. Most of the victims were seven years old or younger, although older children and teens are also victims.

The fraud can happen after a data breach, when the thieves either use or sell victims' personal information. The Javelin study found that children are more likely to become victims of identity theft than adults following a data breach. And these breaches can occur at different organizations that commonly have children's data, including schools, doctors' offices, daycares, and summer camps.

Thieves may also target parents and try to get them to share their children's Social Security number (SSN) and other personal information. These attacks could come in a variety of forms, from phishing emails to dumpster diving. As is always the case, be cautious about what you share online and over the phone.

Sadly, the fraudster isn't always a stranger. In many cases, the thief may be a parent, family friend or relative who has access to the child's SSN. Familiar fraud can be particularly difficult to deal with as you might not want to press charges against a close friend or family member.

How Fraudsters Use Stolen SSNs

A minor can't open a loan or credit card on their own. But the lack of information in their credit history could be beneficial to fraudsters. In a sense, they're clean slates. Plus, parents rarely try to check their child's credit, which means the fraud might not be detected right away.

A fraudster might be able to use the stolen identity in many of the same ways they can use an adult's stolen information:

• Get a bank account
• Open a credit card or take out a loan
• Apply for a job
• Rent an apartment or home
• Set up new utility accounts
• Request government benefits, such as unemployment
• Schedule medical procedures
• File fraudulent tax returns
• Sell the stolen identity to other fraudsters

Rather than using the child's identity directly, fraudsters often use a stolen SSN to create a synthetic identity. To do this, they combine the real SSN with fake identifiers, such as a fake name and date of birth. They can then use the synthetic identity in many of the same ways, but there's even less of a chance that the SSN holder will find out. And, in some cases, the same stolen SSN gets used to create dozens of synthetic IDs.

In 2020, the Social Security Administration launched an electronic consent-based verification service (eCBSV). The tool allows organizations to quickly check the name and date of birth associated with an SSN. However, it's still being tested and rolled out.

How to Detect and Help to Prevent Child Identity Fraud

Parents sometimes learn about the theft when they're denied benefits. But often, child identity theft goes undetected until years later, when the child tries to apply for their first bank account, student loan, credit card or auto loan.

Knowing that it's a possibility, here are a few things to watch out for:

• There's suspicious mail in the child's name, such as credit card pre-approval, notice from the IRS, or a traffic ticket.
• You get collection calls or notices for bills in the child's name.
• You're denied government benefits, such as nutrition assistance, because someone else is using the SSN to receive benefits.
• Your child has trouble opening a bank account or getting a driver's license.

With the dangers in mind, there are a few steps you can take to help protect a child's identity:

• Limit what you share about your children on social media. While you may want to share big announcements and pictures online, the information (such as their birthday) could be compromising.
• Don't share their SSN. Question whether the other person or organization truly needs to know your child's SSN. And ask whether you can share other information instead.
• Keep private documents secure. You may also want to get a safe and keep all your private documents locked up, including birth certificates, Social Security cards and tax forms.
• Check and freeze their credit. You can check to see if your children have a credit file with Equifax, Experian or TransUnion, the three major credit bureaus. The process is a bit different at each bureau, and you may need to mail the request. You can also request that the bureaus freeze (or create and then freeze) their credit reports. A freeze can help keep someone from opening a new account in their name.
• Teach them to protect their information. Include identity protection in the financial literacy lessons you share with your children. For example, make sure that kids know not to share a picture of their brand-new driver's license online.

If you or your child are victims of identity theft or fraud, know that you're not alone. Resolving the issue can be difficult, but you can report the crime and get a recovery plan from the Federal Trade Commission on IdentityTheft.gov. In addition, if you are a member when the fraud occurs, myFICO's credit and identity-monitoring plans include identity restoration services and identity theft insurance policies that may be able to help.

Louis DeNicola

Louis DeNicola is a finance writer based in Oakland, California. He specializes in consumer credit, personal finance, and small business finance, and loves helping people find ways to save money. In addition to FICO, Louis works with a variety of financial services firms, credit bureaus, and educational websites, including LendingTree, Credit Karma, and Experian.