Identity theft and related types of fraud tend to spike during times of crisis, and the COVID-19 pandemic has been no different. But whether there’s a spike or not, scammers are always out there. That’s why it’s a good idea to take some reasonable steps to protect yourself.
One of the best ways you can prevent someone from stealing your identity is to freeze your credit. In fact, freezing your credit became free in 2018. And, in addition to freezing your own credit, you can also freeze your child’s credit. And it may be a good idea.
According to data published by Javelin Strategy & Research in 2018, children are particularly vulnerable to scammers — more than 1 million fell victim to identity fraud in 2017. In addition, families were burdened with over $540 million in out-of-pocket costs.
Credit expert John Ulzheimer says children are easy targets because they have no credit history. It’s a blank slate, which makes it easier for someone to open fraudulent accounts and rack up charges in their names.
HOW TO FREEZE YOUR CHILD’S CREDIT
While freezing your credit tends to be a fairly straightforward process that can usually be completed online, freezing your child’s credit is a bit more involved and must be done through the mail. Each credit bureau has its own protocol for freezing a minor’s credit, and some require more documentation than others. To streamline the process, begin by gathering up the following:
- Your ID (a state-issued driver’s license or passport)
- Birth certificates for you and your child
- Social Security cards for you and your child
- A recent utility bill or bank statement as proof of residency.
You then have to connect with all three of the national credit bureaus to put a freeze in place. Here’s how to do it:
Equifax: Fill out this form, then mail it to the address listed at the bottom with copies of the required documentation.
Experian: Complete this form and send it to the address featured at the center of the page, along with copies of the requested documents. Experian also requests that you provide any previous addresses for the past two years.
TransUnion: Follow the instructions listed here under “How do I freeze for my minor child?” for how to place a “protected consumer freeze,” which explains the documents required, and mail to the address listed at the end.
Once a credit file is frozen, each credit bureau will assign a personal identification number (PIN) to your child’s file. You will need to provide the PIN (online, by phone or by mail) to temporarily or permanently thaw your child’s file. If you lose a PIN, you can get a new one, but it might take some time.
WATCH OUT FOR THESE RED FLAGS
Freezing your child’s credit eliminates the need to continually monitor his or her credit reports. But you will want to keep an eye out for certain warning signs that point to your child’s Social Security number being misused, such as:
- Receiving pre-approved credit card offers in the mail.
- Getting turned down for government benefits.
- Getting a notice from the IRS.
- Receiving calls or letters about unpaid bills.
“Others find out about it when they apply for credit legitimately for the first time and find out their credit report is polluted with stuff that was opened in their name, and they didn’t even know about it,” Ulzheimer says.
The best way to get ahead of it is to proactively check your child’s credit report. Again, if there’s no foul play, there shouldn’t even be a credit file. In light of the COVID-19 crisis, the three major credit bureaus (Equifax, Experian and TransUnion) are now allowing consumers to pull their credit reports weekly until April 2021 at no charge via AnnualCreditReport.com.
BEWARE OF ‘FAMILIAR FRAUD’
Unfortunately, many children are victimized by a family member or a close friend who gains access to their Social Security number. In fact, most children who are the victim of identity theft know the person who committed the crime. In addition, the personal devastation makes it one of the most under-reported crimes. That’s because many people are uncomfortable filing a police report that names a loved one.
If you find yourself in this situation, Ulzheimer says you have one other option: accepting tacit liability and going through the process of settling the debts yourself. Getting those balances in good standing won’t get those accounts off your child’s credit report, but it will stop any further attempts to collect the debt.
“The problem, however, is that the damage has been done,” Ulzheimer says. “And the byproduct of that is going to remain on this credit report for up to seven years.”
WHAT TO DO IF YOUR CHILD’S IDENTITY IS STOLEN
If you do happen to uncover a fraudulent account in your child’s name, you may want to consider filing a police report.
“You have rights under the Fair Credit Reporting Act that if you file some sort of report with an enforcement agency, you can take that to the credit bureaus to have that stuff purged and permanently removed,” Ulzheimer says. “You can also get out from any liability issues with respect to the debt.”
You’ll also want to visit IdentityTheft.gov to report the fraud, unlock resources from the Federal Trade Commission and create a recovery plan.
No matter how you choose to move forward, freezing your kids’ credit is one of the best tools for securing their identities and preventing future abuse. The process shouldn’t take more than an hour or so of your time, which is a small price to pay to safeguard their financial future.