Editorial Policy

Children Increasingly Victims of Credit Card Identity Theft

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By Eva Norlyk Smith, Ph.D.
August 3, 2010

For many young adults, opening that first credit card account is an important rite of passage. However, for some, that momentous step on the stairway to adulthood has been stolen out from underneath them while they were still kids—sometimes even by their own parents.

Child identity theft has become increasingly common: the percentage of underage fraud victims almost doubled from 3 percent in 2003 to 5 percent of identity theft victims in 2006, and experts estimate that the number has only grown exponentially over the past few years. Sadly, it is often close relatives, including parents, who are involved in cases of child identity theft.

Experts explain that malicious intent is not necessarily involved: many times, parents, aunts and uncles, or even grandparents who are strapped for cash will apply for a credit card or loan in the child’s name with the full intention of paying it back. However, once the money is gone, it’s gone, and the child ends up as the one held accountable.

Because credit card companies, loan agencies, and other lenders don’t check for age, relatives with access to a child’s social security number can easily apply for loans and credit cards and even create gas, electric, or telephone accounts in the minor’s name.

One young man, whose estranged father used his identity for years, found his dreams of becoming a policeman dashed when his abused financial record caused a background check to fail. Victims of this kind of theft also see their credit scores ruined and often are unable to obtain credit cards, student loans, a car, or reasonably rated insurance. Many jobs also use credit checks when sorting through applicants. In rare cases, the victim even ends up having to file bankruptcy for a debt they never personally accrued.

Unfortunately, in the current economic climate, experts don’t expect this troubling type of identity theft to diminish, on the contrary. However, there are resources that victims can turn to in order to get help. The Identity Theft Resource Center, for example, offers free help to victims and those who think they may have been taken advantage of.

For parents or relatives concerned a child may be at risk, a quick credit check can reveal whether or not the minor’s identity has been compromised: anyone under the age of 18 will not have a credit file unless they’ve been victims of fraud.

In the event of theft, file a police report using the credit report as evidence. With a police report, all fraudulent accounts will be blocked from the victim’s credit record within 30 days. In order to acquire the fraudulent application and transaction records, contact the credit card and loan companies and send them the police report.