Protecting Your Children from Identity Theft

You have them vaccinated against illness. You teach them to look both ways before crossing the street and not to talk to strangers. You do everything you can to protect your children from the dangers of the world. But a new threat has emerged, one that has already victimized more than half a million children - identity theft.

Millions of Americans have already fallen prey to identity thieves. Of those, 5 to 7 percent are children younger than 18, according to the Federal Trade Commission. Many industry experts, however, warn that the actual number of child victims may be significantly higher because most don''t yet know their identities have been stolen. They won''t find out until they apply for their first credit card or driver''s license, get their first job or a parent tries to obtain government assistance for the child.

Why Does ID Theft Happen?

Identity theft is possible because there is no one government or credit group responsible for protecting your credit or ensuring accuracy. Most parents have the Social Security Administration issue a social security number when their child is born because they want the tax credit. Sadly, some parents want more than just the tax credit and use the child''s personal information to open lines of credit. This is possible since there is no federal system in place to verify that the right person is using that social security number. Most people believe that the database held by the credit bureaus should be doing this, but the reality is that children have no file with the credit bureaus until they establish credit.

"Credit bureaus aren''t in the business of protecting your data or even making sure it is accurate," says Todd Davis, chief executive officer of LifeLock, which provides an ID theft prevention program for adults and children. "That''s not the credit bureau''s job."

Children are becoming a favored target because the credit bureaus will have no previous information relative to the child''s social security number. This situation gives the thief an opportunity to "build credit" using your child''s social security number but all their own information.

"It''s not like the credit bureau will receive the credit application and say, ''Hey wait, this social security number belongs to an 8-year-old girl,'' " says Davis. "There is no system in place right now that will flag this application as a non-match."

Instead, the bureau will have no information on file and will take whatever information is listed on the application as the accurate data for that new social security number. Davis also said that thieves will often start out with small lines of credit and may actually make timely payments as they build the faulty credit record. Then they start using the pre-approved credit card offers with large lines of credit, eventually leaving your child''s social security number with a devastated credit record.

So What Can You Do?

With such terrible odds, it''s definitely time to do something to protect yourself and your children from identity theft:

* To start with, beware of emails, phone calls or other solicitations for your personal data. Always verify who it is that is asking, and make sure there is a legitimate reason why you want them to have the requested information.

* Since mail is such a vulnerable point for your personal information, be sure that your mailbox has a lock.

* Secure important papers that you store at home (like bank account statements) by keeping them in a locked file cabinet.

* Try to keep your files trim, only hang on to those papers you need.

* Invest in a paper shredder and don''t throw out any paperwork before shredding it.

If you want to be more proactive, here are some others steps you can take to protect your family:

* Place fraud alerts on your social security number with the three major credit bureaus. This alert will put the credit bureaus on notice to speak to you directly before issuing any new lines of credit (so don''t be alarmed if you aren''t immediately approved when applying for a store credit card). Also keep in mind that these fraud alerts must be renewed every 90 days, but the bureaus do share this kind of information, so alerting one means that bureau will likely pass the information on to the other two.

* Opt out of pre-approved credit card offers by calling 888-5-OPT-OUT. You will still get offers from the banks you have existing accounts with but not from any new ones.

* Once a quarter request a credit report for everyone in your family. You can do this by contacting the credit bureaus. Ensure that all information on your report is accurate. For your kids, their social security numbers should return credit reports with no information -- if there is any info that''s a red flag.

* Enroll in an identity theft prevention program. LifeLock''s program can cover your entire family. Once enrolled, LifeLock will take the above three steps for you to make sure your family''s personal information is secure. Although the program is meant to be preventative, the company backs up it service with a $1 million guarantee -- in the event your credit is compromised they''ll do whatever it takes to correct it. New subscribers can receive 20 percent off the annual cost of LifeLock if they enter the promotional code "ProtectKids" when prompted at the time of enrollment.

To learn more about LifeLock, visit www.lifelock.com.

Copyright © 2007, ARA Content