Consumer Protection Rights & Your Children

A blog post for myFICO Kids – Making financial awareness, protection & health a part of the entire family.

 

blog-national-consumer-protection-week-kids-need-protection-tooNational Consumer Protection Week is an annual campaign that creates awareness about consumer information and protection. There’s actually a lot of regulation put into place to protect consumers that many people don’t even know about.

 

Thanks to the CARD Act, consumers are protected from unfair rate hikes, retroactive rates and late-fee traps, and important terms and conditions must be publicly available. That’s just to name a few. What you may not realize though, is that consumer protection isn’t extended just to adults; children need protection, too. Your child’s personal information, like yours, is protected by law. Sadly, identity theft threatens the security of your child’s personal information.

 

One source found that child identity theft was 35 times the rate for adults in the same population. Another source found that kids under the age of 18 are 51 times more likely to become victims of identity theft. You can help your child avoid huge costs and wasted hours recovering from identity theft by following the below tips.

 

Preventative Measures

 

Like valuable jewelry or family heirlooms, important documents should be locked up somewhere safe or placed in an actual safe. Fifty-six percent of child ID theft occurs from theft of their Social Security number (SSN). Consider protecting your last will and testament, all family birth certificates and Social Security numbers, and your vehicle’s registration by locking it up in a safe.

 

Preventing identity theft can seem obvious at times, such as shredding important documents, but others aren’t as obvious. Here are a few examples:

 

  • Break family tradition – Many families pass down family names as tradition. You can avoid a potential headache by changing the middle name or by even using a different spelling. Some collection agencies report debts only under a name and address, causing the debt of the parent to potentially be reported under the child’s name.
  • Look for “https” – When entering your child’s personal information online, only do so on sites that display the “https” at the beginning of the link. That indicates that the information being entered is encrypted.
  • Never carry your child’s Social – You should never carry your own or your child’s Social Security number with you in your purse or car. Mistakes happen, so it is possible to forget your purse at a restaurant, lose your wallet or your car could get broken into. It may be a headache memorizing your family’s SSNs, but that doesn’t compare to the migraine of recovering from identity theft.
  • Ask – A lot of paperwork for school registration, doctors’ offices or clubs and programs will include a space for your child’s SSN. Ask if it’s absolutely necessary to include that information; if it is, ask why. Most circumstances where a Social Security number is required include a document explaining some form of non-disclosure and the terms of why such information might be required to be disclosed.

 

chart

(Courtesy of IdentityTheftAssistance.org)

 
 

Who to Watch Out For

 

Unfortunately, a large number of child identity thefts occur by family members. Children don’t release their Social Security number nearly as often as parents do because there’s just no reason for it. Before a child is old enough for employment or driving, a Social may only be required at their doctor’s office, to get health insurance coverage through their parents or for school enrollment.

 

Thirty-six percent of child ID theft cases involved the child’s relative, while thirty-five percent involved a family friend. It’s a shame that parents need to be cautious around friends and family, but it’s necessary to help your child turn 18 with a completely clean slate. Do not keep your family’s SSNs laying around the house and don’t give them to anyone besides your spouse. I would even refrain from letting your children know their own Social; that will add another layer of protection.

 

What to Watch Out for

 

As a parent, it’s important not to overlook certain things that may seem harmless at face value. Let’s review a few red flags that may alert you to a potential ID theft:

 

  • Preapproved credit card offers in your child’s name –This could be a simple mistake, but sometimes pre-approved offers are mailed based off cookies from searching around the Internet. It’s not common for children to search for credit cards and enter their information in there somewhere.
  • Calls from collection agencies –This one should be a huge red flag. There is no reason why a collection agency should be directly trying to contact a child before they have bills in their name.
  • IRS notification – As a parent, you claim your children as dependents and must enter in their Socials. The IRS double checks for accuracy. If they send you a notice your child’s Social is being used on another tax return, you should confirm with your spouse or ex-spouse whether or not they are claiming your child.
  • Desperate situations – This ties into the statistic that 36% of child ID theft cases involve a relative. Watch for those that are close to you, with prior or current access to important documents who may be in a financial pinch. If you know a family member has really poor credit or is desperate for money, but just got a new credit card or loan, that’s a red flag. If a family member’s license has been suspended or revoked, but they somehow got it quickly reinstated, that’s another red flag.

 

Part two of this post will cover what to do if you discover your child has been a victim of identity theft. Check out the National Consumer Week website for some great resources, and get involved by sharing this information and spreading the word about child identity theft.

 

Kari Luckett writes about financial topics for CompareCards.com and is the content strategist for CompareCards.com. Kari is the lead writer for myFICO Kids, a column focusing on teaching children about smart financial habits.  

 

Sources: CSID, Federal Trade Commission, Juvenile Justice Information Exchange, Identity Theft Assistance Center, Identity Theft Resource Center

About Kari Luckett

Kari Luckett writes about financial education and personal finance topics. She is the Editor for CompareCards.com. Connect with her on Google Plus, +KariLuckett, or Twitter, @KAL1418.

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