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Five Years Old and in Debt

By Emily & Will

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Can a 5 year-old be $30k into debt? Have a mortgage, a car payment, and 4 credit cards? Unfortunately, yes.

Starting at birth, tens of thousands of children fall victim to ID theft. And at times it's not strangers stealing their identity—it's someone in their own family!

And guess what? This could have happened to you, too.

Child identity theft is a severe problem for a number of reasons. A child's age can allow fraud to go unreported for years, even decades. By the time it's discovered, the damage to their (or your!) credit history may be difficult to legally dispute or irreparable altogether.

Types of Victims

Thieves can easily steal identities from infants, toddlers, and children because credit card companies can't confirm the age of the applicant through the Social Security Number alone.

As if financially preying on children isn't horrible enough, as mentioned above, it doesn't always happen at the hands of a stranger.

Approximately half a million children have had their identities stolen by a parent or family member. With unlimited access to their child's personal information, a parent or family member can take total advantage of a clean credit slate.

There are three common scenarios involving child identity theft:

  • Child victims who find out as adults: The thief may be someone the child does or doesn't know and it could go undetected until they are denied a driver's license, college loans, or credit. Because the crime occurred years ago, it may be hard to prove. If the victim is able to trace it back to the perpetrator, they will spend years contesting the charges and still may end up with a bad rap.
  • Parents find out their child is a victim: Parents can discover fraud by investigating suspicious financial activity, such as receiving multiple credit card offers and statements addressed to their child, trying unsuccessfully to open a savings account or college fund. If the fraudulent user is identified, parents will have to go through the long process of proving that the victim is their child and that he or she is actually a minor and not responsible for the charges.
  • Family identity theft: A low credit score and money issues can tempt parents or family members into the unthinkable act of stealing their own child's identity. They may justify it with intentions to pay the bills before the kid is old enough to know. If the child finds out about any fraudulent outstanding charges as an adult, they have the choice of turning the relative into authorities or dealing with a tarnished credit history.

Effects on the Victim

Aside from having their financial lives tainted with credit abuse, stolen identities can potentially cause roadblocks when applying to college, getting a job, or even qualifying for a place to live.

Filing a police report protects the victim through federal and state law and will help their case proving fraud to the Credit Card Company or bank. Victims should contact a criminal defense attorney, as the legal process of proving fraud can be lengthy and complicated.

FoolProof Tips:

  • If you think you've become a victim, immediately file a police report and document it with the Federal Trade Commission.
  • Don't carry your social security cards around and risk losing or having them stolen. Keep all your documents in a secure place, like a safety deposit box or safe.
  • Be cautious when revealing your information to any organization and make sure you understand why it's needed and how they'll protect it.
  • If you're receiving credit card promotions in the mail, it may just be a marketing tool. To be safe, check all three credit-reporting bureaus for any existing reports on your credit.

(Child) identity theft is an awful crime and the FoolProof team hopes these tips help! Be safe!

Cheers, Emily & Will.

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