Identity theft is on the rise. According to the FTC, millions of Americans filed fraud reports last year. In 2021, people filed a total of 5.7 million reports. In addition to identity theft reports and complaints about businesses, 2.8 million of those reports were about fraud. Consumers reported losing more than $5.8 billion to fraud in 2021, an increase in reported losses of more than 70% over 2020.
For details on different types of identity theft and how you can prevent it, read Identity Theft Prevention & Identity Theft Response.
Dishearteningly, children are at greater risk for identity theft. In fact, according to the Identity Theft Resource Center, they are 51 more times likely to be subject to identity theft than an adult! Identity thieves attach a new date of birth, name and address to a child’s social security number and can use this false identity for years without detection. Their victims may not learn about the crime until adulthood, by which time their credit is ruined and they are rejected for student loans, jobs and places to live. Older Americans are also at risk of fraud and identity theft.
At Savvy Cyber Kids, we encourage our students, teachers, parents and grandparents to use technology for good. But the fact remains that not everyone plays by this rule. This means that it’s up to each of us to keep ourselves and our loved ones safe in the virtual world.
One of the steps that we should all take is freezing our credit. What does a security freeze do? With the security freeze on your credit file, no one can open a new account (or take out a mortgage, get a car loan or other financial commitment on your behalf) unless they have your secret pin. Freezing your credit files has no impact on your existing lines of credit, such as credit cards. You can continue to use them as you regularly would, even when your credit is frozen.
Here Is What You Need To Do:
- When you place a credit freeze on your credit files, you will either select or be provided a password or PIN (personal identification number) so that you can temporarily remove the credit freeze when you want to add a new credit account to your credit file. Maintain this password or PIN in a secure location so that it will be available when you need to temporarily lift the credit freeze.
- You must place the credit freeze at each of the three major credit bureaus individually. The three major credit bureaus are Equifax, Experian and TransUnion. To learn more about placing a credit freeze with each of the three major credit bureaus, click on each of the following links:
Freezing your own credit, or that of another adult in your household or care, is a relatively straightforward process. It is a task you can complete in less than 30 min or so.
While everyone should consider placing a credit freeze on their credit files, it is especially important that seniors, those responsible for incapacitated seniors and parents of children give extra consideration to initiating credit freezes. Identity thieves specifically target children and seniors because children and seniors do not typically open new credit accounts and therefore have little need to check their credit reports.
Javelin Strategy & Research’s 2022 Child Identity Fraud Study reveals that 915,000 U.S. children were victims of identity fraud in the past year, costing an average of $1,128 for a single household—$752 for the fraud itself and $376 out-of-pocket to resolve the fraud—while spending 16 hours on resolution overall.
However, when it comes to placing a credit freeze on a child’s identity, the process is much more demanding and time-consuming. First, you need to check on your child’s credit with each of the three credit agencies. While the agencies do not maintain credit reports for minors, they will be able to tell you if your child’s identity was falsely used to establish credit. If you discover an identity theft crime, you will need to immediately work with the credit agencies to begin to unravel this very challenging situation that is without a doubt a lifetime stain on your child’s financial identity. Assuming their credit is intact, and if your state allows a protected freeze for a minor, you will need to follow each agency’s verification processes, by mail and not electronically. This may include providing:
- A written request to place a “protected consumer freeze” on your child’s file;
- A ‘proof of authority’ of your child via a court order, power of attorney or written, notarized and signed description of authority; and
- Identification documents for both you and your child, such as a Social Security number, proof of name and address (Driver’s license, State or Government issued ID card) and/or a Copy of Birth Certificate (for minor)
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