A few years ago our daughters, Allison and Amanda, then ages 12 and
13, began receiving credit offers in the mail. At first I laughed,
thinking it was absurd that a middle school child would be
receiving such offers. Then I started to wonder why.
When I started asking the parents of
other middle schoolers, I came up with a theory. Many of us had
recently applied for frequent flyer numbers for our kids. Soon
after, the credit offers started jamming the mailbox. Those
frequent flyers miles came with strings attached.
Certainly, the experience of a handful
of middle schoolers is not conclusive evidence that airline and
credit card companies are in cahoots to get our kids into the
credit card world. But it was enough to convince me to take a hard
look at all the mail that comes in for the girls and to be much
more careful about giving out their personal information.
The credit offers the girls received
were just part of some misguided marketing effort. That was the
good news-our girls' identities hadn't been stolen.
When someone-it can be a stranger, but
it's much more likely to be someone your child knows and is close
to, such as a parent or guardian-steals your child's name, address,
Social Security number or other personal information and uses it
for their own financial gain, the first signs that something is
wrong often comes through the mail.
Signs of possible trouble
Monica, who did not want her real name
to be used, didn't discover her identity had been stolen as a child
until she was adult. She had just become engaged and went to the
bank to open a savings account with her fiancé. Their application
was rejected, the bank told her, because she had bad credit.
"I assumed it was my college loans,"
To confirm it, she ordered a copy of
her credit report and discovered, to her horror, that she owed more
than $40,000 in credit card debt.
Fortunately for Monica, she discovered
that the credit cards were opened before she turned 18. "Because I
was a minor, clearing up this mess was relatively easy."
Monica spent one year, tons of
paperwork and many hours assembling legal documents to prove it was
not her debt.
Monica had one more hurdle to overcome
after getting her credit cleared: the emotional hurdle of realizing
it was her father who stole her identity and used it for his own
Today, tuned-in parents can help their
child avoid what happened to Monica as a young adult.
Start by getting a current credit
report if any of the following takes place in your child's name
(only get a credit report if you suspect a problem):
n Pre-approved credit offers
n Collection notices for unpaid
n Denied application for a driver's
n Denied applications for student
loans, apartment or credit card
n Lots of telemarketers call asking to
speak to your child
Fixing the problem
Cleaning up financial identity theft
involves the same laborious process, regardless of whether the
victim is a child or an adult. First, contact one of the three
credit reporting agencies, Experion, TransUnion or Equifax-there's
no need to call all three, one call activates the other two-to file
a fraud alert. Next, report the crime to the police. Finally, start
to contact credit issuers to begin the long process of clearing
your child's records.
Laura Foley, founder of the nonprofit
Identity Theft Resource Center, has written a step-by-step tutorial
to help you navigate this process. It is available online at
IDTheftCenter.org. Go to "victim resources" and select solution 5,
"How do I order a credit report for my child?" IDTheftCenter.org
and the three credit reporting agencies do not recommend that you
automatically check your child's credit report annually unless you
suspect a problem. Ordering reports unnecessarily can confuse the
computerized systems of the credit reporting agencies and open a
door to thieves because it could establish a credit report,
according to IDTheftCenter.org.
Remember, it is much easier to avoid
the problem of identify theft than to fix it. Do not give your
child's personal information out to anyone.
Child identity theft is easy to
prevent. It's hard to fix, but easier to fix if caught early. Each
year when you make your child's annual physical appointment, do one
more thing: make a fiscal appointment to check for fraud.
Susan Beacham is the founder and CEO of Money Savvy
Generation, a financial education company that provides innovative
products and services to help parents and educators teach children
the basic skills of personal finance, www.MoneySavvy
Generation.com. E-mail her at susan@MSGEN.com.
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