Fraudsters have taken their bad behavior to a new low: stealing children’s identities. This scheme is known as “synthetic identity theft”. It involves identity thieves using a combination of fake information, like a fictitious name and birthdate, with real information, like a child’s social security number, to create fraudulent accounts.
A child’s social security number does not have a credit profile or history. The fraudster applies for a credit card under the synthetic identity which is typically rejected, but it creates a “person” that doesn’t exist. Subsequently, the fraudster applies for additional credit accounts for that fabricated person. The fraudster typically builds good credit in these accounts by making small charges and paying them promptly. When the credit limits are high enough, the identity thieves max out the accounts and discard the identity.
Fraudsters also sell synthetic identities to immigrants who want to live or work in the U.S. And right out of today’s headlines, State unemployment benefit programs have been inundated with fraudulent claims by identity thieves in 2020.
The connection of a social security number with fraudulent activity doesn’t go away over time. And, unfortunately, theft of a child’s social security number may go undetected for years, until someday that individual applies for credit.
Children born after 2011 are at a higher risk of synthetic identity theft. Prior to 2011, the Social Security Administration (SSA) issued social security numbers by date of birth and geographic location. Therefore, persons born around the same date in the same area had similar social security numbers. The SSA began randomizing social security numbers in 2011, wrongly thinking it would reduce fraud. However, a randomized social security number cannot be cross-referenced to information about a date of birth or location.
How can you protect your child’s identity? Don’t provide a complete social security number when requested on a form or application. The last four digits of the social security number should be adequate in most situations. If the social security is required, ask why and how the information will be protected.
This is especially critical given the escalation of large-scale data breaches and the proliferation of personal identity information (PII) for sale on the dark web.
Helpful information for reporting and recovering from identity theft is available from the Federal Trade Commission at IdentityTheft.gov.