ID Thieves Target Kids

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The latest form of identity theft doesn’t depend on stealing your Social Security number, according to an article published by the Milwaukee Journal Sentinel. Now thieves are targeting your children.

Nowadays children have Social Security numbers practically from birth, years before they even think about establishing a credit rating. Unscrupulous businesses are using computers to find these dormant Social Security numbers, and selling those numbers to help people establish phony credit and run up huge debts they will never pay off.

Online companies use computers and publicly available information to find random Social Security numbers. The numbers are run through public databases to determine whether anyone is using them to obtain credit. If not, they are offered for sale for a few hundred to several thousand dollars.

Because the numbers often come from young children who have no money of their own, they carry no spending history and offer a chance to open a new, unblemished line of credit. People who buy the numbers can then quickly build their credit rating in a process called “piggybacking,” which involves linking to someone else’s credit file. Many of the business selling the numbers promise to raise customers’ credit scores to 700 or 800 within six months.

If they default on their payments, and the credit is withdrawn, the same people can simply buy another number and start the process again, causing a steep spiral of debt that could conceivably go on for years before creditors discover the fraud.

The crime can come back to hurt children when they get older and seek credit for the first time, only to discover their Social Security number has been used by someone else.

Experts say the fraud is difficult to stop because it’s so easily hidden and targets such vulnerable people. Other than checking with the credit bureaus to see if there is a credit file associated with your child’s Social Security number, there are no specific tools for safeguarding the number.

The Fair Credit Reporting Act guarantees you access to your credit report for free from each of the three nationwide credit reporting companies (Equifax, Experian, and TransUnion) every 12 months.  (AnnualCreditReport.com is the only authorized source for the free annual credit report that’s yours by law.)

Monitoring your credit is one of the best ways to spot identity theft. The Federal Trade Commission recommends checking your credit report at least once a year to correct errors and detect unauthorized activity. Rather than getting three reports at once, we advise people to obtain one credit report every four months from one of the three credit reporting companies on a rotating basis. By requesting the reports separately, you can monitor your credit more frequently throughout the year.

We’ve always recommended doing it for yourself. Now do it for your kids too.

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