For most people, the thought of their children being victims of identity fraud is even more chilling than being a victim themselves.
While children are less at risk for identity fraud than adults, when it happens it can be much more devastating because the fraudulent activity can go undetected for years, making it all that much harder to restore the victim’s good name.
A study from ID Analytics found that 140,000 identity frauds are perpetrated on minors each year.
In addition to the rate of child identity fraud, the study also found:
- Credit card and wireless activity most common – 60 percent of the potential fraudulent identity use alerts sent to minors originated from the credit card industry. The vast majority of the remaining alerts were from the telecommunications industry, mostly wireless providers.
- Take the alerts seriously – minors who received an alert through the service were seven times more likely to experience fraud than an adult. They received 0.5 percent of the identity use alerts, but yielded 3.5 percent of the cases of fraud.
“Child identity fraud poses complex challenges to consumers, businesses and regulators. Unfortunately, minors’ identities are particularly appealing to fraudsters because their personal data is untainted, legitimate and less likely to be monitored for misuse,” said Tom Oscherwitz, chief privacy officer at ID Analytics. “This new study finds that child identity fraud is more than a hypothetical risk. Well over 140,000 U.S. kids are victims of the crime today. Our children need better protection. A comprehensive solution to child identity fraud requires a layered approach reflecting advances in technology and business processes, legislative guidance and consumer education.”
ID Analytics conducted a study of more than 172,523 children enrolled in its Consumer Notification Service at some point during the 12-month period, from April 1, 2010 to March 31, 2011. Seventy percent of the enrolled minors were 13 or under.
Parents and/or custodial guardians of the enrolled children identified over 600 possible cases of child identity fraud, 330 of which were confirmed by credit card issuers and service providers as actual identity fraud. In total, 55 percent of the possible fraud cases identified turned out to be fraud.