In a study from Javelin Strategy and Research published in May, more than one million children were victims of identity theft in 2017. Of those, 66% were under the age of eight. Up until now it was next to impossible to freeze a child’s credit file because there was no history for them. Children are the most vulnerable individuals for identity theft as they have clean credit reports and a lot of parents don’t think about trying to check them for possible fraud. Beginning September 21, 2018, it will be much easier for parents to protect their children from identity theft.
In May, a new federal law was passed: the Economic Growth, Regulatory Relief, and Consumer Protection Act. Under this act every state is required to offer free credit inquiries and freezes to parents who want to check their child’s credit. This law also allows for unlimited free credit freezes for adults as well. Prior to this some states charged for the freeze unless you could prove you were a victim of identity theft. Because a child has no credit, up until now putting a freeze on their files was next to impossible and leaving them extremely vulnerable.
A second law which also went into effect in May requires that the Social Security Administration accept electronic consent of individuals who want to allow permitted companies like banks to verify the name, date of birth and Social Security number with the Social Security administration. Prior to this, verifying that information with the SSA was a very time consuming process that required a lot of paper work. With this new law financial institutions will be able to quickly verify a person’s social security number without the delay or paperwork.
Children are by far the most targeted group for identity theft. In a lot of cases they don’t use their social until they are ready for college and are applying for student loans and a credit card. By then, if their credit reports have not been checked, they will most likely be a victim of having their identity stolen. By the time they do apply for anything they could already have charged off credit cards or even worse on their credit report and this could take years to correct. Criminals will steal a child’s social security number and create false identities. They will then open credit cards, apply for loans, etc. A study done by Experian shows that by the time a child is 18, one in four will have had their identity compromised.
Starting Sept 21st it really is imperative that parents become proactive and check their child’s credit files regularly. Most children until the age of 16-18 don’t have an actual file so it is suggested that the parents “create” a file for them and then put a security freeze on the files. Freezing a minor’s file is the best way to prevent identity theft from happening to them. Once the law goes into effect parents can go to each of the main bureaus websites, www.Experian.com, www.Equifax.com and wwwTransUnion.com. They will have instructions on how a parent can check their child’s reports and if necessary “create” a file for them so that a freeze can be put in place.
While there is never a “bulletproof” way to avoid identity theft, at least now, for minors these new rulings will make it much harder for criminals to target children.