Consumer Blog

Identity theft is when someone uses your personal information, such as your Social Security number, to open new accounts, steal your tax return, or receive certain benefits. They could rent an apartment, apply for loans, or get a credit card in your name. And it can make your life difficult while you try to recover your credit rating.

Anyone can be a victim of fraud, and sometimes it’s not enough just to freeze your credit (though you should start there). Fortunately, you can take several steps to protect yourself and your family.

Protecting Children

Children are assigned a Social Security number at birth, and that number can be used by an identity thief to get credit cards, open bank accounts, rent an apartment, apply for loans, utility services, and even government benefits.

Even before they start school, your child’s personal information will be stored by countless government agencies and companies, meaning it could be at risk of being used for fraud.

Protection is the best prevention, so here are some things to stay vigilant of and some ideas for staying ahead of the game when it comes to protecting your children’s online and offline identities and their financial futures.

Protecting Teenagers

Teenagers are at special risk for fraud simply because they spend so much time online and are exposed to many phishing opportunities. Phishing is a fraudulent attempt to obtain someone’s password or credit card information. Once a thief has this information, they can make fraudulent purchases or access sensitive information. Here are some of the common frauds facing teens:

• Scholarship, Grant, and Financial Aid Fraud: As the cost of education continues to rise, many people fall victim to scams based on false scholarships, grants, and financial aid. Perpetrators usually ask for sensitive data like social security numbers and bank account information to “verify” your eligibility or identity. Their true aim is to steal personal information and gain access to your financial accounts.
• Information Phishing: Teenagers and young adults spend nearly nine hours every day consuming media online, whether it’s on social media platforms, websites, or apps. This media often calls for engagement, opening a two-way conversation of sorts. While a comment on a friend’s photo can be harmless, some situations can expose teens and young adults to information phishing and put them at financial risk.
• Money Prizes and Money Transfers: Money-based prizes and money-transfer scams operate in different ways. While these forms of scamming don’t initially target only teens and young adults, they are the group that often falls victim to them.

Here are some things that you can do to stay protected.

• Identify the warning signs. These are a few signs that can tell you if a fraudster has possibly stolen your child’s identity:
  • You don’t receive bills or paperwork (like medical statements or government documents) associated with them
  • Their financial account has unauthorized transactions
  • They receive tax documentation, but they aren’t employed
  • They receive direct mail or phone calls soliciting expensive products or services
  • Their credit score shifts in either direction
  • There are small “test charges” on their debit card
  • They are rejected for credit in their young adulthood because of poor credit scores
• Stop problems before they occur. Be particularly vigilant with anything that has their personal information on it:
  • Keep all of your child’s paper and electronic records in a safe place
  • Shred documents that contain personal information before throwing them away
  • Be very selective about sharing their personal information — especially online — and ask why it’s necessary and how it will be protected
  • Never share your child’s Social Security number unless it’s with a highly trusted party, and only use the last four digits whenever possible
  • Protect yourself in situations that put your family’s information at risk
• Pro Tip: When your child’s sixteenth birthday approaches, use tools like FREEScoresAndMore, Identity Guard, LifeLock, or Credit Karma to check if they have a credit report. This will give you time to correct any issues with fraud before they apply for a job, car, or student loan, or rent an apartment.
• Repair the Damage. If there is evidence of fraud on your child’s credit report, quickly reach out and notify all those who should have your child’s private information, this is a critical first step. Here’s what else to do:
  • Call every credit reporting company — Equifax, Experian, TransUnion — and ask them to put a fraud alert on your child’s information and request that they remove all accounts, account inquiries, and collection notices from anything associated with your child’s name and Social Security number
  • Contact the businesses that misuse your child’s information and ask them to close and flag fraudulent accounts
  • File a report with the FTC or call 877-438-4388. A police report may be necessary if the fraud is medical or related to taxes
  • In Montana, this can be done through the Montana Office of Consumer Protection

And if you ever have any questions about fraud, be sure to ask your local credit union.

Learn from other personal finance blogs about Kids & Money:

• • How to Teach Kids to be Smart with Money
  • 12 Ways to Teach Kids to be Smart with Money
  • Allowances 101: Should You Give Your Child an Allowance