Children targeted for clean credit history
An interesting story just out of the United States on ID theft attempts on the credit files of children. Whilst Australia has vastly different laws when it comes to children and credit history, we want to share this story with you, to show that children are targets for fraudsters – and to explain what the dangers may be for our Australian children when it comes to fraudsters and their credit file.
By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repair and www.fixmybadcredit.com.au.
An alarming report by ABC 2 WBay last week ‘ID Thieves Targeting Children’s Clean Credit History’, revealed that children and adolescents have become the fastest growing sector of identity theft victims in the United States. In the U.S., children are allocated a Social Security number from birth, and it is this number that fraudsters are using to steal the identities of their young victims, and take credit out in their name. Here is an excerpt from that story:
Experts warn from the time your child gets a Social Security number, their personal information needs to be protected.
“Be aware of how your children’s personal information is used just like your own information–Social Security number, and date of birth–be aware of how it is being used,” says Jim Walsh, U.S. Postal Inspector.
In a recent case, more than 500 elementary school kids in Los Angeles had their information compromised. A suspect with access to school files sold the kids’ personal information to another suspect.
“There were hundreds of accounts opened and most of the accounts were used to get money,” said Walsh.
The suspects withdrew cash advances, or they would sell the names to make fake IDs.
Postal inspectors say children have clean credit histories, which makes them appealing to criminals.
“If they apply for a loan or try to get credit, they could find out their credit is basically ruined and wouldn’t know it the whole time they are growing up,” said Walsh.
That’s why it’s important to periodically check your child’s credit.
Unlike the U.S. system, Australian children don’t have a social security number, so they are protected from any immediate identity theft. But what Australian Police have been concerned about in the past is that children are still targets for fraudsters due to their clean credit history, but instead of using personal information straight away as in cases in the U.S. it may be being stored or ‘warehoused’ until the child turns 18.
The main area Police have been concerned about is Facebook – which remains incredibly popular with children, and gives them the option to openly share their personal information on the internet.
The Australian Federal Police’s national co-ordinator of identity security strike team, Ben McQuillan spoke about the dangers of identity crime as far back as 2011 at a forum in Sydney on money laundering and terrorism.
He warned listeners about what was then a new trend of ‘warehousing’ which involves storing data for a time, making it harder for a victim or bank to trace where and when the data was stolen.
”If people know your full name, your date of birth, where you went to school and other lifestyle issues, and they were to warehouse that data, there is a prospect that could then be used to take out loans or credit cards or to create a bank account that could then be used to launder money,” Mr McQuillan told the Sydney Morning Herald.
This warning was echoed by Queensland Fraud Squad’s Superintendant Brian Hay, who warned that criminals were targeting the personal information of our young Facebook users.
Supt Hay said criminals had been known to be storing the personal information of children around the world in databases to be used when they turn 18 and are able to take out credit.
“We know that the crooks have been data warehousing identity information, we know that they’ve been building search engines to profile and build identities,” he told Channel 7’s Sunrise program in October 2011.
“We need to tell our children if you surrender your soul, if you surrender your identity to the internet it could come back to bite you in a very savage way years down the track,” he said.
This data warehousing could leave the newly credit active young person blacklisted from credit well into their 20’s. For 5 years they are locked out of credit, refused cards, loans, even mobile phones. It need not be major fraud to be a massive blow to the identity theft victim. Unpaid accounts for as little as $100 can have the same negative impact on someone’s ability to obtain credit as a missed mortgage payment. So any misuse of someone’s credit file can be extremely significant.
Proving the case of identity theft when attempting to recover a clear credit rating is already difficult for the individual to undertake, as the onus is on the victim to prove to creditors they didn’t initiate the credit. Adding to that the fact that the perpetrator would be long gone with the actual act of identity theft happening years earlier – and those young people will have a very difficult task of recovery indeed.
So how can we protect our children? In the same way we may protect our own identity and credit file.
It begins with taking an active role in children’s computer use, and realising that their personal information is just as coveted as our own. Perhaps even more so – as the likelihood the child will have a clean credit history to begin with is even higher.