Monday, January 24, 2011

New Identity Theft Scheme Targets Kids

From Margie Tann iSekurity
Source: 19ActionNews/Cleveland, OH [excerpted]

The latest form of identity theft doesn't depend on stealing your Social Security number. Now, thieves are targeting your kid's number long before the little one even has a bank account.

Hundreds of online businesses are using computers to find dormant Social Security numbers - usually those assigned to children who don't use them - then selling those numbers under another name to help people establish phony credit and run up huge debts they will never pay off.

Authorities say the scheme could pose a new threat to the nation's credit system. Because the numbers exist in a legal gray area, federal investigators have not figured out a way to prosecute the people involved.

The scheme works like this:

Online companies use computers and publicly available information to find random Social Security numbers. The numbers are run through public databases to determine whether anyone is using them to obtain credit. If not, they are offered for sale for a few hundred to several thousand dollars.

Because the numbers often come from young children who have no money of their own, they carry no spending history and offer a chance to open a new, unblemished line of credit. People who buy the numbers can then quickly build their credit rating in a process called "piggybacking," which involves linking to someone else's credit file.

Many of the business selling the numbers promise to raise customers' credit scores to 700 or 800 within six months.

If they default on their payments, and the credit is withdrawn, the same people can simply buy another number and start the process again, causing a steep spiral of debt that could conceivably go on for years before creditors discover the fraud.

What can a dutiful parent do to guard against ID theft?
Some tips for protecting your offspring:

1. Never Reveal Your Child's Social Security Number

Many schools ask for a social security number, especially when you enroll your child in kindergarten. This information, however, is rarely required. But if you do have to provide it, make sure the principal keeps all student files in a safe place.

2. Hide Your Child's Name

Anyone with a kid knows you need to label everything you send to school. But, that doesn't mean you have to write your child's name in a spot that can be easily seen by strangers.
Be particularly careful with backpacks. They often come with identification tags that children love to fill out. Explain to your little one that she's better off excluding the family's address and keeping her name on the inside of the bag.

3. Teach Computer Safety

Kids often make it easy for criminals. Twenty seven percent of 9 to 17-year-olds maintain a public and personal blog, web page or other online space, according to Intersections; one in five children report doing things on the Internet of which their parents wouldn't approve. Since we can't monitor our sons and daughters at all times, you need to explain that revealing any information can put them at risk for identity theft.

4. Monitor all Junk Mail

If you notice your child getting credit card solicitations and other junk mail, there's a good chance someone got a hold of his personal information; you need to check if his identity has been compromised.

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