Why It’s Not Easy to Freeze Your Child’s Credit File
By Ann Carrns September 21, 2011 3:32 pm September 21, 2011 3:32 pm
In her job as an analyst specializing in the retail banking world, Julie McNelley talks to a lot of bank executives. Recently, she says, she has heard concerns about child identity theft involving the use of a minor’s Social Security number to commit financial fraud.
How serious a risk is child identity fraud? The Federal Trade Commission recently cited a report from ID Analytics, an identity-theft prevention firm, estimating that 140,000 minors may be at risk each year. (For perspective, there are 73 million Americans under age 18, according to the latest Census.) Sometimes the perpetrator isn’t a stranger but a strapped family member in need of fresh credit.
A report this spring from CyLab, a research center at Carnegie Mellon University, said an analysis of 43,000 children registered with a commercial identity protection service found that 10 percent of them had someone else using their Social Security number. But the statistical significance of the finding in the general population is undetermined, the report said.
Still, child identity theft can be particularly insidious because it may go undiscovered for years, until the child grows up and applies for credit. So Ms. McNelley, who is also a parent, decided to take the initiative and seek a security freeze in her young son’s name at the three major credit-reporting bureaus. (My colleague Ron Lieber wrote about credit freezes in a recent column.) She doesn’t have reason to believe his information is being misused, she said. “I’m choosing to err on the side of caution.”
But Ms. McNelley, who blogged about her effort. found that she had trouble accomplishing her mission. In fact, according to the three major credit bureaus, it’s not really an option, unless a child is already a victim.
A security freeze is a tool that can be used to shut access to an existing credit file, said Rod Griffin, director of public education for Experian, one of the major bureaus. Most children don’t have credit files — or at least, they shouldn’t. (The main exception is if a parent has added a teenager, say, as a cardholder on a credit card account; that may establish a file.) Generally, a file is created the first time an application is received for credit. So if a child’s Social Security number hasn’t been used on a credit application, there should be no file. And “if there isn’t one,” Mr. Griffin said, “there’s nothing to freeze.”
Spokesmen for TransUnion and Equifax gave similar responses to a question about whether parents could freeze access to a child’s Social Security number. A security freeze, the TransUnion spokesman noted in an e-mail, “applies to a credit file, not a SSN.”
So rather than starting out by asking for a freeze, parents may want to step back and consider if they have reason to
suspect that their child’s information may be at risk. Gabby Beltran, a spokeswoman for Identity Theft Resource Center, a nonprofit group, said it recommends that parents initiate an inquiry with the credit bureaus only if they suspect a problem. (Repeated inquiries, she says, may inadvertently create a semblance of a credit record, which is what you are trying to avoid.) Warning signals may include getting preapproved credit offers in your child’s name in the mail (although that can sometimes happen if you open a savings account in your child’s name, so you shouldn’t panic if that happens), or calls from collection agencies about accounts in your child’s name that you don’t know about.
If you are worried, you can find information from Experian and Transunion on their Web sites about how to check if there is a credit file in your child’s name. (An Equifax spokesman said parents could contact the bureau regarding a minor child’s credit file at the following address:Equifax Inc. In care of minor child, P.O. Box 105139, Atlanta, Ga. 30348. The letter must state the child’s Social Security number and include a copy of the child’s birth certificate as well as the parent’s driver’s license or other identification.)
Generally, when contacting the bureaus, you must send documentation via Postal Service mail to prove you are the parent or guardian of the child in question. (The Identity Theft Resource Center offers sample letters to send.)
If there’s no file, there’s probably no problem. If there is a file, the bureau will send it to you. If you see evidence of fraud, you can request a fraud alert to flag potential creditors of the problem and take steps to correct the record. Mr. Griffin says Experian will agree to a freeze or fraud alert if there is a report and will work with the parent to remove fraudulent accounts.
There are commercial services that offer to monitor your, or your child’s, Social Security number for potential misuse. A unit of Experian, for instance, offers the service for about $20 a month.
Consultants say it makes sense to take care with your child’s Social Security number. You must provide it if establishing certain financial accounts, but it’s not usually mandatory in other cases. If it’s requested at your pediatrician’s office, or to register for school or for child athletic activities, ask why it’s being sought, how it’s used and how the information will be protected if you provide it.
Ms. McNelley says she never provides her child’s Social Security number at a doctor’s office, and she has never been questioned about leaving that space blank on a form. She says she is waiting for a response to her written requests for a credit freeze for her son and will update her blog when she hears.
Have you ever suspected misuse of your child’s Social Security number? What steps did you take?Source: bucks.blogs.nytimes.com