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Protecting children from identity theft

by Mary Ann Campbell

Child identity theft is one of the fastest-growing segments of ID theft crime, according to personal finance columnist Jean Chatzky. If your child uses e-mail or social networking sites, explain the risks of interacting with strangers and how important it is for them to protect their personal information.

What to do if you suspect child identity theft

If you suspect your child's identity has been compromised, contact credit bureaus (Equifax, Experian and TransUnion) to request a credit report for your child. If there is no credit report, that's good news. A credit report should not exist until your child files his or her first credit application or starts paying utility bills in their own name.

But if there is a credit report in your child's name, and you are sure you or your child did not initiate the items on the report, take action. For starters, make sure a security alert is filed with all three major credit bureaus. The Identity Theft Resource Center has useful recommendations.

A surprising source of credit theft

Credit cards do bring great benefits to responsible individuals, helping them to achieve personal and financial goals. What parent wouldn't want their child to have the best possible chance to achieve personal and financial goals, free from any challenges a case of identify theft could present?

Sadly, those who commit identity crimes against young people are often family members or close friends who have access to the child's personal information and Social Security number. So-called "friendly fraud" accounted for 30 percent of fraudulent new accounts opened in 2010, according to the annual report by Javelin Strategy & Research. Because children start with a clean slate, loans can be taken out, new credit cards can be opened, utility and telephone accounts can be established. Children are often targeted because their identity theft can go undetected for a long time, giving criminals great opportunity for fraud. In fact, credit checks don't verify age.

Protect your child's future credit score

Many aspects of children's adult lives will be affected by their credit scores. The interest rates we're charged for credit card accounts and other loans is directly correlated to credit scores. The cost of credit, cell phone contracts, insurance rates, the ability to rent, and even the ability to be hired are life events that can be enhanced or denied based on their credit history. Do take the time to check and protect the credit history of your children.

Published 02/15/11 (Modified 11/20/13)

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