As parents, we do everything we can to protect our children. We lock doors before bed every night, teach them about “stranger danger”, and make sure they wear a helmet on their bike ride.  But how do we protect them from identity theft?

It might not seem like a real threat but a child credit history is a “blank slate.”  This is a prime target for a fraudster. In 2017, more than 1 million children were identity theft or fraud victims.

How can we protect our kids? Below, Windward lists a few ways to keep your children’s information safe:

Freezing your child’s credit

As of September 21, 2018, a Federal law allows people to freeze and unfreeze their credit at the three major credit bureaus with no fee.  This law includes provisions for parents of children under age 16 to freeze their children’s credit. If your child is over 16, they will need to freeze their own.

What is a credit freeze? 

A credit freeze is blocking access to your credit. The freeze makes it impossible for new creditors to evaluate your creditor see your credit history without you “thawing” (i.e. unblocking access) for a set time period. The credit freeze requires you to establish a confidential PIN number.  To “thaw” your credit for a few days (for example, to apply for a new credit card), you’ll unblock your report with the PIN number. You’ll want to protect your pin number and make it easy to remember, especially for your children’s accounts.  It may be years before you have a need to thaw their credit. It’s wise to share the child’s PIN number with your estate planner or designated guardian named in your will, in case you aren’t around when it is needed.

How do I freeze my or my child’s credit?

You’ll need to contact the three major credit reporting agencies by phone or online. Here are the websites to establish a security freeze:

• TransUnion: transunion.com/credit-freeze
• Experian: experian.com/freeze/center.html
• Equifax: equifax.com/personal/credit-report-services/

Requesting your child’s credit report

After freezing your child’s credit, it’s wise to request a report of any existing credit history. By law, the three major credit reporting agencies must provide one free credit report annually. Windward suggests requesting a report from one of the agencies every four months. If your child has no credit history, this is good news and you’ll be notified there is no history to report.

How do I request my child’s credit report?

You can request your child’s report by mailing a paper form (the paper application is here) or you can request the report online. Here is the website to request a credit report: www.annualcreditreport.com. If you’re a Windward client, contact us and we’ll add you to our Credit Report Mailing List. We’ll request (by mail) your credit report be sent directly to your home.  Windward never sees your report.

Keep Social Security numbers private

This article suggests 60% of child victims personally know the perpetrator responsible for their identity theft (compared to 7% of adults). If possible, keep your children’s social security number private.  Lock up tax returns, social security cards, birth certificates, etc. Familiar fraud is a crime of opportunity so keep the information secure.

Keeping an eye out for suspicious mail

Your child should not be summoned for jury duty, have pre-approved credit card offers, or receive collection calls. If your child receives any of these, it may be a sign of identity theft.

 

Taking these simple proactive steps, may save hours of inconvenience and aggravation down the road.

 

Sources:

https://www.cnbc.com/2018/04/24/child-identity-theft-is-a-growing-and-expensive-problem.html

https://www.cbsnews.com/news/new-law-lets-consumers-freeze-credit-for-free/

https://www.nytimes.com/2018/09/14/your-money/credit-freeze-free.html

 

This blog is provided by Windward Private Wealth Management Inc. (“Windward” or the “Firm”) for informational purposes only. Investing involves the risk of loss and investors should be prepared to bear potential losses. No portion of this blog is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax or legal advice. Certain information contained in the individual blog posts will be derived from sources that Windward believes to be reliable; however, the Firm does not guarantee the accuracy or timeliness of such information and assumes no liability for any resulting damages.

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