How to Protect Your Children from Synthetic Identity Theft

When we think of identity theft, we often think of a criminal using our personal information (i.e. name, DOB, SSN) in toto to commit some kind of fraud. Synthetic identity theft however doesn’t steal all of your identity, just a piece of it – often your SSN – to create a new identity.

To create a new identity for the purpose of synthetic identity theft a criminal first needs to obtain an SSN that doesn’t have an active credit profile. A young child’s SSN is ideal for this since the child will have an SSN, but probably isn’t establishing and using credit.

Randomized SSN put children born after 2011 at especially high risk for synthetic identity theft - and the theft of a child’s SSN can go undetected for years. Taking over a child’s SSN was made easier after the Social Security Administration switch to randomization in 2011. Before then, the digits were tied to birth year and geography, so it was more difficult to use a child’s SSN without it being discovered.

Once a criminal has an SSN the next step is to manufacture additional identity information such as name, date-of-birth, and an address to receive mail. The criminal now applies for credit using the made-up identity and the child’s SSN. This application for credit will almost certainly be declined because there is no established credit profile for this identity. It does however create a record with the credit reporting agencies (Trans Union, Equifax, Experian) for that identification.

Over several months, or perhaps even a couple of years the criminal works to build this identity and most importantly to establish credit associated with that identity. Given time, and some work on the part of the criminal perpetrating this synthetic identity theft, the made-up identity gains some initial credit.

The criminal can now run up that credit with purchases and cash advances and probably get away with a couple thousand dollars in ill-gotten gain. A more savvy criminal might however play this out a bit longer and build the initial credit limit, even using and paying the initial credit line to establish it as legitimate. 

Once the credit for the synthetic identity is built to a high enough level the criminal “cashes out” by maxing out the credit cards, loans, etc. and then abandoning the identity.

When we work to protect our personal privacy, it is essential that we don’t overlook adding safeguards to protect our children’s privacy as well.

• Protect your child’s SSN. Never provide your child's SSN unless specifically required to do so by law. Protecting your child's SSN from disclosure is one of the most important things that you can do you protect him or her from becoming a victim of identity theft.
• Check your child’s SSN earnings report with the Social Security Administration (there shouldn’t be any recorded earnings associated under your child’s SSN unless he or she has a job).
• Place a security freeze on your child’s credit reports. 
• Child Identity Theft Inquiry (TransUnion)
• Equifax requires a letter to establish a security freeze for your child.
• Experian provides information on protecting your children here.
• Innovis provides information about minors & protected consumers here.

The Federal Trade Commission offers guidance on protecting your child from identity theft.