You join us again to talk about minors being at risk of identity theft.
This is a very big deal, Skip. As you know, identity theft is becoming more and more common. With each new breach – be it Equifax or Yahoo! – we are reminded just how vulnerable we are to fraudsters trying to use our personal information for their gain. However, not many of us give much thought to this theft when it comes to our kids or grandkids. This is a problem according to a recent report, Skip. Minors are increasingly targets of identity theft, and in fact thieves are more likely to capitalize on kids’ data.
What does this news report tell us?
According to an analysis from Javelin Strategy & Research, among individuals who were notified that their information was exposed in a breach in 2017, 39 percent of minors became victims of fraud, compared to just 19 percent of adults. The report found that more than 1 million children — or 1.48 percent of minors — were victims of identity theft or fraud in 2017! Even more shocking, two-thirds of those victims were age 7 or younger! And one more sinister fact, Skip : minors are also much more likely than adults to become victims of familiar fraud — meaning the identity thief is someone they know. The Javelin report estimates 60% of child victims personally know the perpetrator, compared to just 7 percent of adult victims. Family friends accounted for a full third of all cases.
Why are thieves going after minors?
A great question, Skip. When we think of identity theft, our minds skip to the money in our bank account, or fraudulent charges to our credit cards. However, minors present a much bigger opportunity for criminals, allowing them to open entirely new lines of credit before someone catches on. An expert from Javelin noted that there is a lot of value in it for criminals when there is no credit report tied to a Social Security number.
In addition to the lack of credit reports, by preying on information stolen from minors, thieves can create entirely new identities using a combination of real and fictitious information. These so-called synthetic identities can even exist before children are born! According to the Identity Theft Resource Center, which helps consumers dealing with such fraud, the change to randomized Social Security numbers in mid-2011 has allowed criminals to build fraudulent identities for people who do not exist. The Identity Theft Resource Center has seen cases where children are issued Social Security Numbers that already have earnings and credit histories associated with them!
How do we protect our kids or grandkids?
There are a few steps you can take. First, only provide information to those who need it. Oversharing personal details – especially a child’s SSN and birth certificate – is what gets many people in trouble. The same goes for financial information, like a bank account in a child’s name. Once exposed, this information can never really be re-secured. Second, you can freeze a child’s credit so that no lines of credit can be opened in the kid’s name. Next, be on the lookout for signs that fraud has already occurred. Minors should not receive voter information packets, jury summons, or collection calls. If you see these, you want to look into the possibility of fraud.
Finally, Skip, talk to your kids. Make them aware of the dangers of sharing information online or with friends. Ensure they are securing their devices. Whether it is credit thieves or other dangerous people, you want to do everything you can to ensure your kids are protected.
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Mellody Hobson is President of Ariel Investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts. Additionally, she is a regular financial contributor and analyst for CBS News.