Child identity theft poses unique problems

Earlier this year, the Indianapolis-based health insurance company, Anthem Inc., suffered a security breach that caused almost 80 million customers to have their account information stolen. Hackers got access to personal data including birthdates, email addresses, Social Security numbers and employment information, giving them the opportunity to steal countless identities.

 Toops

“In February, our law firm filed the class action against Anthem over their data breach of (millions of customers), many of which were children. Their (a child’s) information is not out in the public realm nearly as much as an adult’s, and it concerned a lot of parents,” Lynn Toops, an associate at Cohen & Malad LLP, said.

After the breach, Toops said she received numerous calls from worried parents and provided them with further information about handling the problem. She continues to do so while the Anthem litigation moves forward.

Identity theft is not a new problem. However, studies show that it is intensifying, and that means more theft of children’s personal information. According to a survey by the Identity Theft Assistance Center, one in 40 households with a child under the age of 18 has experienced child identity theft.

“When you put it in those terms, this is a never-ending game,” Bill Stanczykiewicz, former president and CEO of the Indiana Youth Institute, said. “Much like drug trade or other illegal activities that law enforcement is trying to help with, this is a never-ending battle. It’s persistent.”

Stanczykiewicz has found that most often, identity thieves are after either a child’s Social Security number and/or birth date. This information can be used for a credit application, and in turn severely damage a child’s credit rating before he or she is even of legal age. Many times, the issue goes unnoticed until years later when the individual applies for a loan.

Velasquez

“It’s usually being unable to get student loans — that’s often how they (children) find out that something is amiss,” Eva Velasquez, CEO and president of the Identity Theft Resource Center, said. “It creates this roadblock that stops them from moving forward in their life. … If a kid can’t get a student loan, they may have to start school late. It puts them behind from the very beginning.”

But parents can begin taking precautions now. Stanczykiewicz suggests, “Keep your eyes and ears open.” If a child receives calls regarding unpaid bills or credit card offers in the mail, it most likely means that identity theft has occurred.

Some safeguards that parents can implement include keeping a child’s Social Security card and birth certificate at home, refraining from posting a child’s birth date on social media and, for married mothers, excluding their maiden name on social media.

Children and teens should also be monitored on social media, because according to a survey from the Family Online Safety Institute, 2 percent of teen respondents admitted to sharing their Social Security number online.

“That number needs to be zero,” Velasquez said. “What we see as the new norm, we see as pervasive — but there’s not a red flag that goes off in their (teens’) heads.”

Above all, Indiana Attorney General Greg Zoeller highly recommends doing a credit security freeze.

“Last year we helped pass a law that allows parents to freeze their children’s credit,” Zoeller said. “It’s called a Protective Person Security Freeze. The difference between this and a normal security freeze is that traditionally, you would have to have a line of credit established by the credit bureaus. … The problem was children aren’t supposed to have a credit record, (and) you couldn’t freeze a credit record that didn’t exist. So, under the (security law) you can essentially freeze (credit) before it’s been established.”

Under this freeze, no one can open up a line of credit until an individual reaches at least 18. Then, he or she must go back and unfreeze the account in order to begin establishing credit. In order to implement the security freeze, parents can go online to the ID theft unit at www.indianaconsumer.com.

“I’d say the best opportunity we’ve ever had (with the website) was when the Anthem breach affected nearly two-thirds of the residents of Indiana,” Zoeller said. At that point everybody realized, ‘I’ve likely had my identity compromised, whether it’s being used or not.’ We saw a huge spike in people who were accessing our website … in fact, we had to bring in additional help for a while.”

In addition to utilizing the online ID theft unit as a defense mechanism, parents can also turn to the office of the attorney general in the event that identity theft does occur. The website allows the office to work with identity theft victims and guide them through the process of reversing any damage, whether it’s by making calls to creditors or providing the forms and requirements to be adjudicated.

“Three years ago we changed the statute that allows people who are victims of identity theft to go before the Circuit Court of their county and file to be adjudicated as a victim of identity theft,” Zoeller said. “Once the court has ensured that you are a victim and not a scam artist, you can then send that court order to the creditors and others and it will help clean up the problems that people used to have to take years and years to fix.”

While going to the Circuit Court is usually a worst-case scenario, both Stanczykiewicz and Velasquez advise parents to first file a police report and contact the Federal Trade Commission.

“The key is prompt contact of law enforcement and prompt contact of the financial organizations,” Stanczykiewicz said. “It doesn’t prove you haven’t done anything wrong, but it’s a good argument in your favor that you’re taking the proper steps.”

Although identity theft as a whole continues to gain widespread attention, recognition of child identity theft lags behind. After staggering statistics are broken down into various types of identity theft, the numbers don’t seem as startling — but they are significant.

Additionally, Velasquez believes that the number of child identity theft cases occurring and the number of cases actually being reported are askew.

“There’s still an issue with reporting because people don’t really know what to call it,” Velasquez said. “They know that it’s some type of fraud, but they don’t know what they’re dealing with. It can be hard to get a good statistic.”

Statistics aside, child identity theft is a growing problem — the February Anthem breach serves as one example. And according to Zoeller, there’s still more to be done.

“I think we’re going to have to continue to look at the statutes to see what other opportunities there are for people in our state,” Zoeller said. “I’m a big advocate for the state’s authority, but these things are well beyond the role of individual states, so I think some of the work is going to have to be done at the federal level.”•