As parents, we are protective of our children. We tell them to look both ways before crossing the road, not to talk to strangers, and not to play with knives. However, in spite of the best intentions, most parents are still leaving their children vulnerable to a new type of crime: cyber fraud.
How Cyber Thieves Target Children
The possibility of identity theft is often overlooked for children, but they are a real target today. In fact, they are an ideal target for cyber thieves because they have clean records that the thieves can use to apply for credit cards, bank accounts, loans, government benefits, and tax breaks. Criminals commonly combine a child’s real social security number with a fake address and date of birth to avoid suspicion.
Even for the youngest of children, cyber fraud is a serious and growing problem. According to a survey released in October by the National Cyber Security Alliance, one in five US households has been notified by a school of a data breach that exposed their students’ personal information. In December, 5.6 million children’s dates of birth and genders were exposed in a data breach at a digital-learning toymaker, many of the victims merely toddlers.
In 2015, about 5.4% of the cases heard by the Identity Theft Resource Center related to children. That may not seem like a large number, but in reality, the frequency of child identity theft is probably much greater, but it usually goes undetected and, therefore, unreported. Thieves often have up to 18 years to use a child’s identity before their credit report is ever reviewed. Many young adults don’t know that they have been victims until they apply for student loans or file their first tax return. By that point, thieves may have been using their identity for years and destroying their credit along the way.
This is a serious problem because it can take years for the victims to remedy the situation and get everything straightened out. In the meantime, they are put at an unfair disadvantage by being denied funding for college, denied applications for credit cards or being subject to extremely high interest rates.
How to Prevent Child Identity Theft
As with many things in life, it is up to the parents to protect their children from cyber fraud. Though it may seem daunting, there are some simple things that every parent can do, including:
Teach your children to be careful online.
While every child has been told not to talk to strangers or leave their mother’s line of sight at the playground, but many of those same children are allowed to roam the world wide web unsupervised. Online predators are skilled at manipulating children into giving them all kinds of personal information and parents must train their children not to fall prey.
Watch for warning signs.
If your teenager goes to apply for a driver’s permit or license and is denied because one already exists, that is a huge red flag. However, there are more subtle warning signs, like the kinds of mail that they receive. A mailbox filled with solicitations for loyalty programs and credit cards can be a sign that there is a credit card already open in their name.
Take action after a data breach.
When personal information has been compromised, many companies offer free credit monitoring for those involved. Take advantage of it to find out more about your child’s credit and to make sure your child hasn’t become a victim.
Monitor their credit report.
Most children do not have a credit report unless they have been added as an authorized user to their parents’ credit card. Every year, parents should check with the credit reporting companies to make sure their children do not have a credit report and request a copy to review if they do have one.
Freeze their credit.
When a credit report is frozen, lenders and others requesting to screen credit are not given access to the report unless the owner gives specific permission. Therefore, new lines of credit cannot be opened in that person’s name. Only 23 states have laws permitting a parent or guardian to freeze a minor’s credit. In the other states, the different credit reporting companies have differing policies regarding children’s credit reports. Congress is working on legislation that would allow the freezing of a minor’s credit report in all 50 states. Placing a security freeze on your children’s credit is the most effective way to protect them from identity theft.
Though many parents are unaware, cyber fraud is a real and growing threat to our nation’s children. If you have any questions regarding identity theft or would like to discuss the measures you can take to protect your children, Wealth & Pension Services Group is here to help. Call our office anytime at 770.333.0113 x 106 or email firstname.lastname@example.org.
William "Bill" Kring is the founder of Wealth & Pension Services Group, Inc, an independent wealth management firm serving individuals and businesses near Atlanta, Georgia. As a twenty year financial veteran, Bill offers broad expertise in wealth management services including asset management, fiduciary consulting, retirement, trust and estate planning, as well as insurance and 401(k) plan services. In his past, he competed as a U.S. Cycling Federation class III rider in both road and track. To learn more about how Bill may be able to help, visit the Wealth & Pension website, connect with him on LinkedIn, call his office at 770.333.0113 x 106 or email him anytime at email@example.com.
call our office at 770.333.0113 x106 or email firstname.lastname@example.org.