Child identity theft is a serious problem – a study issued earlier this year estimated that one in 40 households with minor children has experienced the theft and misuse of at least one child’s identity. Children are tempting targets for identity thieves because their personal information is unblemished; they have no criminal records and no bad credit. That makes their Social Security numbers and other personal information ideal for fraudulent use, from opening new credit accounts, applying for housing rentals, filing for tax refunds, and getting jobs to concealing one’s identity when stopped by the police.
A new Oregon law aims to protect child identity theft victims. It was spurred, in part, by a security breach involving the Eugene School District in 2011, which compromised thousands of school records, including students’ Social Security numbers. Though none of the records were used for illegal purposes, the incident helped to raise awareness and concern about child identity theft. As of September 13, 2013 parents and legal guardians in Oregon can ask credit reporting agencies to create and freeze what are called “protective records” for their children. These are similar to the “credit freeze” that adults can place on their files at the credit reporting agencies, which blocks anyone who might have a permissible reason to check the file – a potential creditor, employer, or landlord, for instance – from doing so.
Children don’t normally have credit files, but credit files associated with them may result when crooks use their names and Social Security numbers, combined with fabricated dates of birth, to create “Synthetic IDs.” Often this isn’t discovered until child identity theft victims become adults and apply for jobs or credit. The Oregon law enables the credit reporting agencies to create a bare-bones record with some of a child’s personal information and lock it up, preventing the use of that information by others. There is a small charge to freeze the record, and at age 18 the child can delete it. The law does allow the child’s record to be used for certain background checks such for screening applicants for employment or apartment rentals. Maryland has enacted a similar law and other states are considering it.