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Criminals Target Children for Identity Theft and Fraud

1.25 million kids a year victimized in the U.S.

A child playing on a tablet
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It’s a crime that sends a shiver of fear through parents and grandparents: A criminal steals a child’s identity and uses the youngster’s personal information to open credit card accounts or make mobile purchases. Such crimes can go undetected for years because kids aren’t filing taxes or applying for loans, which would typically flag ID fraud.

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Child identify fraud is a serious and escalating problem in the U.S., according to an AARP-sponsored report by Javelin Strategy & Research, which explores threats in the digital financial world. Last year 1 in 50 children were the target of identity theft and 1 in 45 were hit by a data breach, Javelin’s survey found.

Nearly $1 billion lost

It’s a costly problem. Losses tied to child ID fraud averaged $737 per family, with overall losses soaring to $918 million, the report states. Resolving child ID fraud took families an average of 13 hours, longer than when adults are victimized.

“It’s a major headache for consumers,” says Tracy Kitten, author of the report and Javelin’s director of fraud and security. And it’s a migraine for the financial industry because it absorbs some of the losses, especially when the child’s information is used to create a synthetic identify — a mash-up of details from a real person and a phony one.

The growth in social media and time spent online, plus the increasing reliance on digital transactions, has added to the risks for kids, according to Kitten, who notes, “That just opened the door for cybercriminals.”

Thus, it’s critical to educate children and the adults who care for them about safe practices online and ways to look out for identify fraud.

Social media poses extra risk

Sharing on social media is fun, but savvy criminals lurk on platforms and exploit posted information to create fraudulent profiles. Identifiers stolen from data breaches or other means are bought and sold in underground forums on the internet. When parents or children post personal information on sites, criminals can figure out where the kids go to school, their birth dates and other identifying details. And it all adds up.

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“If you just look at something in isolation, you’re probably not going to figure too much out,” Kitten says. “But if you look at what people post over time, it’s easy to put together a profile.”

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Most of the victims of child identify fraud in recent years — 73 percent — knew the perpetrator, according to the report. The bad actor may be a parent’s spouse or partner, another relative or a family friend, or someone on a spoofed account who poses as a person the child knows, she says. Kitten warns parents and grandparents to avoid using passwords that include combinations of identifiable information, such as children’s birth dates. The numbers may be easy to remember, but criminals who get them could try to gain access to the adults’ email or bank accounts.

When con artists pretend to be someone kids know, they may ask for personal information — and children may share it without realizing how vulnerable that makes them. If a child accepts a friend request from a spoofed account, the criminal potentially has access to the people the child is connected to online. Bad actors may try to friend their grandparents and other family members, pretending to be one of the child’s pals.

“This whole cycle just perpetuates itself,” Kitten explains. “A child becoming a victim of identity theft can quickly lead to a grandparent being compromised in some way, through social engineering.” 

Protecting your family

Safe online behavior is critical to stopping swindlers. Two key rules: Don’t trust what people say online, and be very cautious about what you and your children post.

The report recommends monitoring children’s online activity, since identify fraud was three times more likely among kids with unlimited and unmonitored internet access than among those whose online activity was scrutinized.

Finally, because child identify fraud can go on for years without families realizing it, parents should consider an identify-protection service for themselves and their children. In addition to monitoring your credit, these services will watch out for social media spoofed accounts pretending to be you or your child, and alert you when your email addresses or other personal information appears in underground internet forums. These services may be offered by your credit card company, homeowner’s insurance company or financial institution or purchased online.  

Parents can freeze their children’s credit, which will halt criminals’ ability to open illicit accounts in their name. This can be done until youths are old enough to seek employment and want to open a checking account or apply for a credit card or student loan.

4 tips to stay safe

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1. Educate yourself and the children in your care about safe online behavior. Teach them not to accept friend requests from people they don’t know and not to provide personal information online to anyone. Monitor their social media use, since children with unlimited internet access are more vulnerable to identity fraud.

2. Be careful about what you and your children post on social media. Keep personal information private. 

3. Monitor your financial accounts. Consider freezing your children’s credit until they are old enough to look for a job and open a checking account or are applying for a student loan or credit.

4. Consider an identity-protection service for you and your children. These alert you when your personal information is being used.

The Javelin findings are from a survey of 5,000 U.S. adults taken in July and August 2021. Here’s the full report: Child Identity Fraud: A Web of Deception and Loss.                                           

Kathryn Masterson is a writer who previously worked for the Chronicle of Higher Education, the Associated Press and the Chicago Tribune. Her byline has also appeared in The Philadelphia Inquirer and Washington City Paper.

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