Recent consumer surveys have shown that while nearly one-fifth of Americans have been victims of ID theft, and more than one quarter of all households have at least one member who’s been a victim of the crime, most identity-related fraud occurs actually outside the credit system. Stolen credit cards are the most common type of identity theft, followed by the sale of personal identification information like Social Security numbers, and the theft of bank account debit cards is not far behind as the third most prevalent form of ID theft.
The problem is that most systems currently used to detect and stop identity theft rely mainly on observing credit transactions to look for discrepancies in a consumer’s purchasing history. However, since most losses related to identity theft occur outside the regular credit system, finance institutions and consumers both might need to keep an eye on what’s happening in other areas of personal identification.
One disturbing new area of focus in identity theft is the growing trend of stealing the identities of children. It seems the criminals are now focusing on the softest targets like children who can become victims without even knowing it. The Federal Trade Commission’s Bureau of Consumer Protection says that child ID theft is a particularly troubling crime because it is often goes undetected for many years. Any child that becomes a victim might not discover the situation until many years later when they apply for a loan or get a background check done for employment.
There are several reasons why children’s identities are stolen 50 times more than the identities of adults, and the first is that most parents have no reason to check on their child’s credit report because most children don’t have credit histories. Because social security numbers have been issued in progressive sequences, identity thieves have learned to steal the newest numbers issued to children. Those numbers allow them to acquire an identity with a clean slate and begin establishing their own credit record with the stolen number.
Identity and credit industry experts advise that the best strategy might be to try to limit the number of people and instances where a social security number is actually viewed. In many cases, there is no real legal reason you must show your SSN when requested and people should simply learn to furnish alternate, less personal forms of identification.
Because credit records are not legally established until a child is 18, parents cannot simply request a report on their children and instead must manually check to see if someone is using a number. There are usually no obvious signs that a child’s identity has been stolen, but when credit card offers start coming to their home in their child’s name, it’s a good sign that something bad is afoot. The only good news in the stolen number racket doesn’t apply to adults whose identities have been hijacked, but does apply to children. Since a child is legally a minor, any contracts or credit card applications signed in their names are null and void from the start. This means child ID theft is far easier to remedy than adult cases and there is no way creditors can enforce collection on children.