How Often Does Child Identity Theft Occur?

Child identity theft involves the unauthorized use of a minor’s personal information, such as their Social Security number, name, or date of birth, for financial gain or to commit fraud. This deceptive practice allows criminals to open bank accounts, apply for credit cards, or even obtain government benefits in a child’s name. The growing reliance on digital information and the increasing exposure of personal data online have made this issue a significant concern for families. Understanding the prevalence and mechanisms of child identity theft is important for safeguarding a child’s financial future.

Current Statistics and Trends

Child identity theft affects many families annually, highlighting a persistent data security challenge. In 2023, approximately 1 million children were victims of identity fraud, resulting in an estimated $1 billion in financial losses for affected families. This figure indicates a slight decrease from previous years, but the problem remains widespread.

Despite a minor decline in reported incidents, the average financial loss per family in 2023 was approximately $1,120. For about 26% of victimized families, these losses exceeded $1,000, underscoring the significant economic impact such fraud can have. Financial burdens include out-of-pocket expenses for services like credit freezes and identity theft protection, plus lost wages from time spent resolving fraud.

The most common age group targeted for child identity theft is children aged eight and younger, accounting for 36% of all cases. This demographic is vulnerable because their personal information often remains dormant and unmonitored. Teenagers aged 13 to 17 represent 23% of victims, while children aged 9 to 12 make up 22% of reported incidents.

Identity theft involving children is often discovered much later than adult identity theft, sometimes only when a child applies for a driver’s license, student loan, or their first job. A study found that over half of child identity theft victims were under the age of six. Delayed discovery means fraudulent accounts can accrue significant debt or negative marks over many years, creating substantial challenges later in life.

Factors Contributing to Vulnerability

Children are susceptible to identity theft due to characteristics of their personal information and its management. Unlike adults, children do not have established credit histories or active financial accounts, meaning their Social Security numbers (SSNs) are largely dormant. This lack of activity makes their SSNs attractive to criminals who can use them to open new lines of credit or accounts without immediate detection.

A child’s personal information is often shared across various institutions, increasing potential points of exposure. Schools collect names, dates of birth, and sometimes SSNs for enrollment and record-keeping purposes. Healthcare providers also maintain extensive personal and medical information for minors, creating large databases vulnerable to breaches. Online platforms, including educational websites, gaming sites, and social media, also gather children’s data, further expanding the digital footprint that criminals can exploit.

Limited monitoring of a child’s credit file contributes to their vulnerability. Parents and guardians often do not regularly check their children’s credit reports because minors do not have credit. This oversight provides a prolonged window for fraudsters to operate undetected.

Children’s innocent nature and lack of online safety awareness also play a role. Children may unknowingly share personal details on social media, online gaming platforms, or through phishing attempts. Their trusting nature can be exploited by criminals seeking information for fraud.

Methods of Identity Theft Against Children

Child identity theft occurs through various avenues, leveraging unique vulnerabilities. A common method involves family members who misuse a child’s personal information. This type of fraud, sometimes called “familial identity theft,” occurs when a relative uses a child’s Social Security number to open accounts, apply for loans, or secure employment, often due to poor credit or a criminal record. These instances are challenging to resolve due to the personal relationship.

Data breaches are another significant source of child identity theft. Institutions storing large amounts of personal data, such as schools, hospitals, and children’s toy companies, can be targets for cyberattacks. When these databases are compromised, children’s personal information, including names, addresses, dates of birth, and Social Security numbers, can be stolen in bulk. This stolen data is often sold on the dark web, accessible to many fraudsters.

The digital landscape, including online gaming and social media platforms, also presents avenues for child identity theft. Information shared or collected on these platforms can be pieced together by criminals. Phishing scams, where fraudsters impersonate legitimate entities to trick individuals into revealing personal data, can target children who may not recognize scams. Malware downloaded through innocent links or games can also capture sensitive information.

Physical theft of documents containing personal information remains a concern. This includes stealing mail, rummaging through trash for discarded documents, or burglarizing homes to find birth certificates or Social Security cards. While less common, these traditional methods still pose a risk, particularly if sensitive documents are not securely stored.

Detection and Reporting of Incidents

Detecting child identity theft presents unique challenges because children do not engage in financial activities that would trigger immediate alerts. One indicator is unsolicited mail addressed to the child, such as credit card offers, bills for unknown services, or collection notices. These communications can signal a child’s identity has been compromised and used to open fraudulent accounts.

Another red flag is when a child is denied government benefits, such as Medicaid or Social Security, due to an existing claim or record under their Social Security number. Unusual calls from debt collectors or inquiries about credit accounts in the child’s name are also strong indicators of identity theft.

The Federal Trade Commission (FTC) serves as a central reporting point. Individuals can file a report online at IdentityTheft.gov, which generates a personalized recovery plan and an Identity Theft Report. This report can be used with law enforcement and credit bureaus.

Contacting the three major credit bureaus—Equifax, Experian, and TransUnion—is another step. While minors do not have credit files, a fraudulent file may have been created in their name. Parents can request a manual search for a credit file using their child’s Social Security number and date of birth. If a file exists, parents can initiate a credit freeze to prevent further unauthorized activity and dispute fraudulent accounts.