Looking to shine a bright light into a dark corner often overlooked by law enforcement, Javelin Strategy & Research shows that the theft of personal information from minors has “reached a crisis level,” researchers said. A new report, the results of which were provided to Infosecurity, found that one in 40 US households surveyed had at least one child whose personal information had been compromised by identity criminals: that translates to an incident rate of 2.5% over the lifetime of the family among households with dependents under age 18.
At particular risk are children in the lower-income ranges. And most disturbingly, the study found that the fraud is often carried out by those who are most trusted: close friends and family. Unfortunately, so-called “friendly fraud” is to blame in many child ID theft cases, and the data shows that 27% of victims reported knowing the individual responsible for the crime.
In fact, the rate of child-related fraud overall may be underreported due to the prevalence of family members who may be linked to the crime and would not admit to the fraud, as well as households where victims do not discover their childhood ID fraud until they reach age 18, researchers postulated.
“In the past two years, we’ve seen the issue of child identity theft garner media and consumer attention, but there are many misunderstandings about this crime and more work needs to be done to educate consumers,” said Steve Schwartz, president of partner services at Intersections, one of the sponsors of the study. “The repercussions of this crime on a child’s financial future can be severe, and criminals are only getting smarter.”
Most of the fraud is carried out through the creation of synthetic identities, and, like adult identity fraud, the study shows that Social Security numbers are the most commonly used piece of information to do so. Usually, the thieves will combine a child’s SSN with a different date of birth to create a fabricated identity that can be used to commit fraud.
More than half (56%) of respondents reported theft or misuse of a child's SSN.
Synthetic identities are very difficult to detect – that’s the bad news. The survey showed that these crimes took 334 days to detect and 44 hours to resolve, and 17% of children were victimized for a year or longer.
The good news is that increasing awareness and education among parents and children is a key and highly effective component to preventing child identity theft. The first line of defense is a simple one: ask why information is needed. If asked for a child’s SSN, the research recommends that parents should always ask the big three: Why is it needed? Isn’t there another way to identify my child? How will my child’s information be protected?
Children should also be educated on the dangers, just as they are with physical threats and “stranger danger.” Parents should remind them to keep their information private: for instance, if asked to answer questions about themselves on the first day of school or for projects, remind children that personal information like their home address, phone number or SSNs should not be shared with anyone.
Items received through the mail or email asking for personal information can give hints into criminal activity that may be occurring, researchers added, recommending that parents keep an eye on terms like “personally identifiable information” and “opt out.”
Overall, knowledge is power when it comes to preventing this kind of fraud. “This survey provides the first solid, verifiable statistics on the causes and consequences of child identity fraud,” said Anne Wallace, president of the Identity Theft Assistance Center (ITAC). “The results will help ITAC and its government and nonprofit partners improve strategies to prevent and detect child identity fraud and assist victims recover from the crime.”