The Growing Epidemic of Child Identity Theft: How Employers Can Help

When Carnegie Mellon Cylab conducted an informal study on identity theft back in 2011, a disturbing piece of data stood out: Children were targeted for identity theft at a rate 51 times higher than adults.

​“Child identity fraud is a serious problem and is frequently overlooked as the public focuses on high-profile breaches involving the personally identifiable information of adults,” said Al Pascual, senior vice president, Research and Head of Fraud & Security at Javelin Strategy and Research.

​Pascual’s company investigated this trend recently in their 2018 Child Identity Fraud Study. They found that over one million children were fraud victims in 2017, with losses totaling $2.6 billion.

​It turns out that the social security numbers of children are the primary target in child identity theft. If a child’s SSN hasn’t been used yet, it can be paired with any birth date and name to create a new identity. Thieves have used stolen child identities for illegal immigration, to open accounts, buy or rent homes and much more. Often children’s SSNs remain unused for years, giving a long window of opportunity for fraud. And identity theft is growing in every sector, affecting 16.7 million U.S. victims in 2017. The theft of SSNs surpassed that of credit card numbers for the first time last year.

​Congress is working on legislation to protect against the threat of child identity theft. U.S. Representatives Randy Hultgren (R-IL-14), Carlos Curbelo (R-FL-26), Kyrsten Sinema (D-AZ-9), and Kenny Marchant (R-TX-24) have joined to sponsor The Protecting Children from Identity Theft Act, H.R. 5192. This legislation would require the Social Security to consult reliable third parties to ensure that a SSN is linked to the right names and birth dates.

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​”[T]he fact that children’s identities and personal information are being exploited at such alarming rates cannot continue to go unaddressed,” said Curbelo. “We need to ensure that fraud detection is modernized to stop these crimes from continuing to negatively impact American families.”

Tips for Parents

​Parents must take the initiative to defend their children against the threat of identity theft. Since the thief is known to the family in 6 out of 10 cases of child identity theft, parents should keep social security cards, birth certificates, tax returns, and medical information in locked storage. Share SSNs only when necessary. Watch for signs of fraud such as unusual statements or bills in the mail and consider a credit freeze with the three major credit bureaus.

How Employers Can Help

Employers seeking to attract prospective employees in this tight labor market will do well to look beyond the standard array of benefits. With the rise in fraud, identity protection for the whole family is a relevant service to consider. Besides the expenses of fraud, victims spend many hours working to recover their identity after the theft is discovered. The emotional distress and distraction due to fraud can deter an employee from functioning well on the job. Offering identity protection to employees gives peace of mind and adds to the overall fight against fraud.