Protect kids from ID theft

Freezing their credit can thwart fraudsters

Amy Wang and her husband spent the first six months of 2016 trying to repair their credit after someone redirected their mail and stole tax forms with sensitive information. A Macy’s, Bloomingdale’s and Kmart credit card were all opened fraudulently in Wang’s husband’s name.

The criminals also gained access to her three children’s personal data, including Social Security numbers.

Now Wang, an occupational therapist in Miami, worries her teenagers’ identities may be in jeopardy, too.

“It took so long to resolve everything else that I don’t want to look for other problems,” Wang, 49, said. “But these guys can hold onto their information and use it anytime.”

She has good reason to be concerned. While children make up a small number of all identity theft cases – more than 1 million minors were victims last year out of 16.7 million – the consequences often are much worse. Child ID victims lose more on average and pay more out-of-pocket costs than adult victims, according to Javelin Research and Strategy, a Pleasanton, California-based research and consulting firm.

But the worst aspect may be the emotional toll. Sixty percent of child ID victims know the perpetrator – commonly a relative or family friend – making it that much harder to resolve their cases.

Fortunately, parents and guardians can now freeze their children’s credit for free, arguably the strongest measures to prevent that agony. They can help their older relatives do it, too.

As for Wang freezing her children’s credit? “I’m definitely doing it,” she said.

Starting Friday, every American by law can freeze their credit reports for free at Experian, Equifax and TransUnion, the three national credit bureaus. Before, it cost people in 23 states $3 to $10 per bureau to freeze their credit report. A freeze prevents lenders from pulling a person’s credit report – a key part of the approval process for a credit card or loan – essentially preventing fraudsters from opening a new account in your or your child’s name.

The new federal law comes just more than a year after Equifax disclosed a major data breach that exposed the personal information of 148 million Americans and prompted lawmakers to rethink identity security.

Children typically don’t have credit reports because they have no loan obligations, so fraudsters use their data to create a fresh credit profile. They build up positive credit histories, paying bills and using credit cards responsibly until they qualify for bigger credit lines or loans they have no intention to repay.

“They do a ‘bust out’ once they have access to a large amount of credit,” said Eva Velasquez, president and CEO of ID Theft Center. “They don’t pay, then walk away, leaving a 10-year-old with this awful credit profile that’s not theirs.”

The loss, too, often is larger because the fraud lasted longer because the parents have no idea that the credit card or loan has been taken out and a credit file created in their child’s name.

A freeze helps prevent fraudsters from manipulating a child’s credit history by denying access. Before the new federal law, not all parents could freeze their child’s credit, depending on state laws. The process, unfortunately, is more cumbersome than freezing your own credit, which can be done online.

For children under 16, parents or guardians must mail in their requests for a credit freeze. Children who are 16 and 17 must request their own credit freezes online at the three national credit bureaus. In some cases, they may need to mail in copies of a driver’s license or state-issued identification.