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Thanks to ID thieves, your child may have more debt than you

Recent investigations show that kids, even unborn babies, are hotter targets than adults for ID theft, racking up millions in debt before parents even know about it.

Did you know that while you may still be considering a name for your precious bundle of joy, someone may have already stolen your unborn babies identity and racked up thousands in debt? Thanks to software which predicts social security numbers, identity thieves can steal a baby's social security number before the child is even born. In fact, if you have or will have any children who were born before June 25, 2011, when was the last time you checked your child's credit report? Ridiculous? Oh yes, but two recent investigations show that children are often the target of ID thieves who use kids' SSNs to buy houses, cars, to open credit card accounts, to secure driver's licenses and to get jobs.

Richard Power with Carnegie Mellon's CyLab released a report [PDF] about child ID theft based on identity scans of 42,232 children who were age 18 and under. It found of the 4,311 cases involving a stolen SSN, 1,767 were linked to utility service records; 537 of the children's SSNs were found in records dealing with foreclosures, mortgages, deeds and property assessments. 415 of the stolen SSNs were used to secure driver's licenses, and another 235 kids' SSNs were found in vehicle registration records. Those new clean slate SSNs of kids were targeted 51 times more than adults. In some cases, the data showed that a child was affected by more than one type of ID theft.

While the youngest victim of Cylab's report was only five months old, 303 child victims were under the age of five. If a SSN has a clean history, then an identity thief can attach any name and date of birth to it. 10.2% of the kids in the report had at least one other person using their SSN, but it is also possible for one SSN to appear on more than one credit file, employment report, or criminal history which are all mapped to different names. The largest fraud was committed against a girl, age 17, who had her SSN linked to eight different individuals who opened 42 accounts and racked up $725,000 in debt. A boy, age 14, had a credit history that went back over 10 years and was used to secure a mortgage on a $605,000 house in California, which went into foreclosure. When applying for an internship, another college-age girl found out she was "unemployable" because she did not "own" her SSN.

The identity thefts were not related to data breaches. According to Power's report, "The primary drivers for such attacks are illegal immigration (e.g., to obtain false IDs for employment), organized crime (e.g., to engage in financial fraud) and friends and family (e.g., to circumvent bad credit ratings, etc.)." The potential impact on your child's future is intense as a stolen identity could destroy or damage your kid's chances for student loans, car loans, acquiring a mobile phone, obtaining a job, or securing a place to live.

You may not know your child's SSN was stolen until he or she reaches age 18 and applies for credit. In an investigation conducted by the Today Show, a 2-year-old boy had his SSN and identity stolen, racking up thousands in credit card debt and had even declared bankruptcy. A teenager had her ID stolen when she was 3 years old and her credit report showed she owed more than $750,000. It only took a couple days for NBC's Jeff Rossen and the Today Show to hunt down and confront two of her identity thieves who are living free as seen in the video below.

According to the Today Show, stealing a child's SSN is much easier than you might think. SSNs are code, with the first three digits representing the state for which it was issued while the last six digits represent the approximate date it was issued. With software, ID thieves can predict new SSNs, so that "when your baby gets a new number at the hospital, it may already be stolen."

Starting in June, the government intends to assign randomized number series to social security numbers which should make the software obsolete that guesses social security numbers. If your child was born before June 25, 2011, however, the software can easily predict those SSNs.

Here's where it gets even more confusing. You should check if your child has a credit report, but it is not advised by the FTC or the Identity Theft Resource Center for parents to check their children's credit reports on a regular basis. Doing so might cause credit bureaus to create reports which put kids' identities at an even greater risk. You should check a child's credit report by age 16 at least, and it has been suggested to check every three or four years for kids under 16. Powers warned that if your kids are receiving pre-approved credit card or other unsolicited financial offers, it's a sign that they may have an open credit file. Yet if parents opt their child out of pre-approved credit card offers, that can create a credit file for your child. Once created, those files cannot be deleted, but they can be suppressed by contacting each credit bureau. If you think your child's identity has been stolen, the Identity Theft Resource Center explains how to order your child's credit report. It also provides a form that parents can use to send to the three major credit bureaus.

And you thought you had enough to worry about and keep you busy with your kids now?

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