Rarely do parents or guardians consider the possibility that their child may have a credit history, and thus few will check to see whether their child has a credit report under their name. This can make children easy targets for identity thieves,[From Debix – Research]
The headline results of this study are as follows:
- The study discovered 5% of the children had one or more credit reports using their social security number
- 3% were found to be actual victims of child identity theft, while 2% were victims of file/credit contamination.
- Among the 5%, the children had on average $12,779 in fraudulent or wrongly assigned debt.
- While the study found that children were more likely to find problems in their credit histories as they aged, an astonishing 12% of those with problems were age 5 and under.
- A handful of cases stand out as especially severe: one child had seven identities listed under his SSN, with several thousand dollars in medical bills, apartment rentals, and credit accounts in collections; another child’s SSN was associated with over $325,000 in debt.
- One in four victims in the study had bills or lines of credit in collections or foreclosure, while almost twothirds of these children had fake or wrong names listed under their SSN.
- 42% of those children with erroneous credit reports only had credit files at one credit bureau, meaning their fraud could have gone unnoticed without checking all three bureaus.
You can see why criminals are going for this mode of attack, because using the SSNs of children must have (on average) a longer time available for abuse before anyone detects fraudulent activity. And remember, behind each of these statistics is a real person left with the mess of cleaning up identity theft.
Police say identity theft is the reason the Internal Revenue Service recently warned a seven-year-old boy from the northwestern Chicago suburb of Carpentersville that he owed back taxes on $60,000. Officers said Friday the second-grader's identity has been in use by someone else since 2001 — not long after his birth. Detectives accused 29-year-old Cirilo Centeno of Streamwood of using the boy's personal information to obtain a truck, three separate jobs, gas and electrical service for his home, a credit card, unemployment benefits and more than $60,000 in pay and services.[From IRS tells 7-year-old boy he owes back taxes on $60,000 — chicagotribune.com]
A credit card? Unemployment benefits? I don't understand how stealing a seven year-old's identity helps you to obtain either of these, but clearly the government and the banks have some pretty lax "know your customer" procedures if a date of birth in 2001 can get you welfare and a line of credit.
In the general case, there are two options for cutting down this sort of identity "theft". Either make identities harder to steal, by moving towards genuine digital identities with strong authentication and clever cryptography, or make identities harder to use. The latter option, given the statistics discussed above, must surely be underexplored. If you couldn't use children's identities to claim welfare or open loan accounts, then why would you bother stealing them? I can certainly think of some cases — trying to masquerade as a child on a social networking site, for example — where people may find the use of children's identities particularly desirable. In fact, if government pressure forces social networking sites to implement far more stringent age and identity verification, this particular crime will boom as kids steal the identities of older friends and siblings so that they can log on with the cool kids. Isn't that exactly what you would do if you were 12?
Nearly a quarter of children between the ages of eight and 12 are evading the age restrictions imposed by social networking sites Facebook, Bebo and MySpace, a poll of young people revealed last night. The results suggest that more than 750,000 children are illicitly using the sites – which are supposed to be limited to teenagers and adults – potentially exposing them to risky communications with strangers.[From Facebook: Children evade social websites' age limits | Technology | The Guardian]
But the great majority of the identity theft measured in the survey is about financial crime, and there I just don't see what's so complicated about adding an "if age < 18 then decline loan / credit card / unemployment etc" line to the code.
These opinions are my own (I think) and are presented solely in my capacity as an interested member of the general public [posted with ecto