Child Identity Theft (Part II)
If you missed the first part of this series, please visit Child Identity Theft (Part I).
Child Identity theft is the fastest growing sector of the identity theft “industry,” and the numbers are staggering. Although it’s difficult to estimate exactly how many children lose their identities since the crime can go undetected for years, the FTC states that 5% of identity theft cases target children, which translates into 500,000 kidnapped child identities per year, and growing. The Carnegie Mellon CyLab Report states that in 54% of the cases, the child was under the age of 14.
The identity thief is not always a stranger. In many cases, it’s a relative with bad credit who takes advantage of a child’s pristine credit. Conveniently, these family members generally have access to the information necessary to maximize the fraud with little attention. This seems absurd, but imagine a parent who is strapped for cash, has a bad credit score and needs to buy groceries. In this case, short-term thinking blinds the relative or friend to long-term consequences. In other instances, the child’s future is not taken into consideration at all.
Frankly, it doesn’t take much to get the crime underway; all a criminal needs is the child’s name and Social Security number. These pieces of personal information are exposed in a variety of ways:
Credit Freeze Stops Financial Identity Theft
Freezing your credit is the number one way to protect against financial identity theft. If everyone in the country applied for a Credit Freeze, identity thieves would quickly be out of business. At least, a major part of their business. Take 30 minutes and lower your chances of identity theft drastically (see the online Freeze links at the bottom of this post).
To go directly to placing a security freeze on your 3 bureau accounts, page down to the bottom section.
Every time you establish new credit (e.g., open up a new credit card, store account or bank account, finance a car or home loan, etc.), an entry is created in your credit file which is maintained by companies like Experian, Equifax and TransUnion (listed below). The trouble is, with your name, address and social security number, an identity thief can pretend to be you and can establish credit (i.e., spend your net worth) in your name.
Your Child is 51X More Likely to Become Victim of ID Theft (Part I)
Allowing our children the innocence of their childhood is paramount to us as parents. Because our children are pretty much the center of our universe, we want to do everything in our power to keep them safe and to safeguard their futures. In this information age, identity theft has become global in its reach and can have devastating consequences for our children’s futures if we’re not vigilant from the day they acquire a Social Security number.
Why are our kids, the very people we most want to protect, so vulnerable? Because they have unused, unblemished credit profiles. Richard Power, Distinguished Fellow, Carnegie Mellon CyLab, recently published the first ever child identity theft report based on identity protection scans of over 40,000 U.S. children. It is extremely alarming that 10.2% of the children in the report had someone else using their Social Security numbers. That figure is 51 times higher than the rate for adults of the same population.
We take so many steps to protect our children. But how often do you check their credit report? “Check my kid’s …credit report?,” I can hear you say. “She is only seven! She doesn’t even have her front teeth yet, let alone a credit card! There are so many years to go before we need to worry about that. Right?”
Study Shows Identity Theft of Children 51X More Likely
Based on a recent assessment of 40,000+ SSNs of children, it was found that more than 10% those SSNs were being used by someone other than the child, far in excess of the rate of misuse in the adult population. The study points out the major issues that surround child identity theft and why we need to start paying attention now. It is more prevalent than many think and the threat is growing. Here are a few of the statistics that were found:
- 4,311 or 10.2% of the children in the report had someone else using their Social Security number – 51 times higher than the 0.2% rate for adults in the same population
- Child IDs were used to purchase homes and automobiles, open credit card accounts, secure employment and obtain driver’s licenses
- The largest fraud ($725,000) was committed against a 16 year old girl
- The youngest victim was five months old; 303 victims were under the age of five
Parents need to stop ignoring child identity theft. It is one thing to ignore it for yourself, but failing to protect children, who are otherwise helpless to this crime, shows a definite lack of parental responsibility.
Acting now on behalf of your child will protect them from consequences common to child victims. Click on Child Identity Theft Protection Tips to learn more about the steps you should take.
Avoid Tax Time Identity Theft
Identity theft speaker John Sileo shares his tax-time identity theft prevention tips.
This past week, a New Jersey man admitted to stealing tens of thousands of dollars in government checks from mailboxes. He stole Social Security, tax refund and unemployment checks from November 2009 to April 2010, then recruited people to cash them using fake IDs. Prosecutors say the scheme cost the government more than $70,000. Not only did this criminal have the actual financial refunds from most individuals, but he also had identity information and even social security numbers.
Around this time of year, tax time, people are more vulnerable to Identity Theft. There is very little that is more damaging and dangerous to your identity than losing your tax records. After all, tax records generally contain the most sensitive personally identifying information that you own, including Social Security Numbers (for you, your spouse and maybe even your kids), names, addresses, employers, net worth, etc. Because of this high concentration of sensitive data, tax time is like an all-you-can-eat buffet for identity thieves. Here are some of the dishes on which they greedily feed:
- Tax documents exposed on your desk (home and work)
- Private information that sits unprotected in your tax-preparer’s office
- Improperly mailed, emailed and digitally transmitted or filed records
- Photocopiers with hard drives that store a digital copy of your tax forms
Data Breach Increases 33% in 2010 and You’re Next
The latest identity theft statistics released by the Identity Theft Resource Center documented 662 data breaches* in the United States in 2010. The message couldn’t be more clear:
Corporations are not yet taking identity theft and data breach seriously enough to properly train their employees, executives, and board on the BOTTOM-LINE DESTRUCTION caused by data breach.
Sure, at this point, many organizations pay lip service to data crimes. They have a privacy policy and their marketing materials state that they do everything in their power to protect your private information. Everything, that is, unless it costs them money to do so. Many corporations tend to hide behind the excuse that in these lean times, they can’t afford to take any additional security steps. But they must understand the disproportionate costs of recovering from theft rather than preventing it. In the simplest of terms, the ROI on data theft prevention training can easily be a thousand-fold. Each record lost, according to the Ponemon Institute, costs, on average, $204 to recover. Lose 1000 records (considered a very small breach), and you are suddenly out $204,000! According to the same study, the average cost for a business to recover from a data breach is $6.75 Million. The average cost to implement identity theft, social engineering and data breach training? In most cases, less than $50,000.
The Top 12 Ways Victims Detect Identity Theft
There are many signs that your identity has been stolen, even if you haven’t started to feel the real pain yet. If you detect these signs early, it probably isn’t too late to keep the damage to a minimum if you act quickly. Unless you are already at number 12…
- Your bills or statements are not arriving in your mail on time.
- You notice unauthorized charges on your credit card bill.
- You notice new accounts or erroneous information on your credit report.
- You are denied credit for a large purchase.
- You receive credit card bills from cards you don’t own.
- You are contacted by a collection agency on an item you didn’t purchase.
- You receive bills for unknown purchases.
- You are unable to set up new banking,loan or brokerage accounts.
- You notice withdrawals on your checking or savings account that you didn’t make.
- The checks listed on your bank statements don’t reconcile with those listed in your check register. Many times these checks are made out to “Cash.”
- You notice a downward trend in benefits on your annual Social Security Statement.
- The police show up at your door.
Identity Theft Prevention this Holiday Season
AAA Hawaii’s Annual Holiday Season Travel and Shopping Poll of 250 local residents reveals that 76% plan to primarily shop this holiday with credit or debit cards. However, almost four in ten of surveyed shoppers have little or no concern about identity fraud happening to them this holiday shopping season! Identity theft is rampant throughout the holiday season. Over the past 3 years stolen data being used in less than one week jumped from 33% to 71%, meaning that they steal today and shop today. Identity thieves count on our lackadaisical attitude toward monitoring our wealth.
Not only does legitimate business pick up during the holiday season, but Identity theft and fraudulent Business seems to be on the rise as well. Especially during these hard economic times Identity thieves are on the prowl more than ever looking for a quick fix to their financial problems. It is just not possible to observe and ward off every threat to our identity. There will be documents that you forget to destroy or lock up, accounts that you won’t cancel, checks that you will mail, and waiters that will disappear with your credit card. It is not practical to think that we can cover every situation that threatens the safety of our identity. But we are not helpless in these situations.
Identity Theft Statistics & Holiday Shopping
Identity theft statistics, dry as melba toast, have something to teach us about shopping this Holiday season. Listening to the media, you would think that the Internet and cybercrime are to blame for most cases of identity theft. They are biased toward technology stories because they are new and interesting (actually, they are starting to get old). If it’s not hackers and phishers, then its war driving and key logging.
But their technological bias is Wrong.
Cybercrime only accounts for 11% of actual identity fraud cases in the latest Javelin study and online shopping accounts for a meager 1%!
When it comes to victims having their identity stolen while making in-store purchases, women have a 94% incident rate and men only 43%. Women tend to shop more in stores, men online.
There is an important lesson in this confusion between reality and perception: don’t automatically believe everything you hear, especially in the media. It’s sexy to write about cybercrime, but the disproportionate amount of attention it receives gives us a false sense that it is the leading cause of identity theft. As you start your holiday shopping, don’t be afraid to shop online, but only if you have protected your computer and internet connection properly.
Here’s what you need to know:
- Technology plays a smaller role in identity theft than we perceive
Son of a Breach! 40,000 Student Identities Exposed
The Social Security numbers, grades, and other personal identity information of over 40,000 former University of Hawaii students were posted online. The information was removed earlier this week, after almost 12 months online. The University apologized and explained that a faculty member doing a study on student success rates believed the information was being held on a secure server. It was not.
Apparently this was the third such breach that the University has suffered from in the past year. Each incident has increased student concern, and the university promises to beef up network security. It is beginning to look like these are promises that they have little intention of keeping. If the University were serious, they would immediately implement a data privacy awareness program to train staff and students on protecting private and sensitive information. There is no indication beyond empty press releases that they have begun taking even this most basic step.
U of H contends that there is no evidence that the information had been stolen or misused to date. That, however, is highly unlikely. Many times, identity thieves will wait until the dust has settled from such a breach to begin using the information for financial gain. The university has advised anyone who may have been affected to obtain and review their credit report for any signs of fraud. Again, if the university were serious, it would be providing free credit monitoring like that offered by CSIdentity.com or IdentityTheft911.com to those affected.
Sileo In the Media
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