Check Your Kids’ Credit: Frankenstein Fraud Is on the Rise

We all know about identity theft, in which the bad guys get your Social Security number (SSN) and other personal data and pretend to be you, then do some illegal shopping and commit other crimes. It can ruin your credit and worse. The other name for it is “true-name identity theft,” since the criminals are using information that matches you across the board.

But they don’t have to do that. Synthetic identity fraud takes a more Frankenstein-like approach. All they need is a valid SSN that they pair up with unrelated names, addresses, phone numbers, and so on. It’s a con that more than two-thirds of people in a new survey by Security.org(Opens in a new window) say they are unfamiliar with, yet it now dominates in identity fraud schemes.

What’s more, the report says, “Synthetic identity fraud is a long con, not a one-and-done thing.” That’s because bad actors typically steal SSNs from people who don’t regularly check their credit scores or get credit reports, including seniors, immigrants, inmates—and especially, children.

That’s right: If you’re not checking your kids’ credit on the regular, you may not even know their SSN or other info is compromised. And 86% of parents have never checked their kids’ credit, because they haven’t heard that synthetic identity fraud is something to be worried about.

Armed with nothing but an SSN, a fraudster can start applying for credit. They’re often turned down, probably because of the lack of credit history, but all it takes is one lender to say yes. Starting with a credit limit of just $500, they can build up to 10 times that amount over months or years. They can then go on a shopping binge and eventually abandon the fake account, leaving behind a wrecked credit history that your kid may not know about until they go to college. Fraudsters prefer younger kids’ numbers for exactly that reason—no one checks them, so they have 10 to 15 years to build up the faux credit.

How do the fraudsters obtain SSNs? Your child’s number could be in your email, your snail mail, on your unprotected PC, or on papers in your garbage and recycling bins. Don’t discount the sheer number of massive data breaches(Opens in a new window) compromising the data about you and yours, of course—it’s not always your fault.

How do you fight synthetic ID theft? True-name ID theft is the crime that credit monitoring and credit freezing can fight the most effectively (though 52% of people don’t even monitor credit using a service). We recommend using identity theft protection software, as well. But it’s harder for fraud alerts and credit freezes to catch on to someone who’s using only a SSN.

Security.org’s report—based on a survey of 1,004 American adults (including 503 parents) from September 2022—spells out the dangers and some steps to prevent them. The most important is not to hand out your kids’ SSNs like candy. On forms, leave the field blank unless there’s a particularly important reason to share it. Shred paper documents that include it, wipe old PCs that might be storing it it (or any data, really), and educate your kids about sharing their SSN—because they shouldn’t. (For more tips, read  “5 Easy Habits to Protect Your Data.”) The report also claims that most perpetrators of fraud actually know the victim; keep the kid’s Social Security card locked up in the safe even when friends and family are visiting.

To find out if your kid or yourself is a victim of some Frankenstein Fraud, check your credit reports. You are allowed to do so for free once a year using all three of the major credit reporting agencies—anyone over age 13 can use AnnualCreditReport.com(Opens in a new window) to order reports from Experian, Equifax, and TransUnion at no charge. For younger kids, you may have to provide information such as copies of their Social Security cards and even birth certificates (as well as your own ID, to prove you’re related), but you can try Experian’s Child ID Scan(Opens in a new window), Equifax’s  Minor Child Department(Opens in a new window), or use the secure form at TransUnion(Opens in a new window) (never send sensitive account info via email).

No kid should have a credit report at all (unless you’ve added them as a user on a credit card). So if any of the above bureaus come back with a report on your offspring, that’s a bad sign. Another is when kids start getting credit-card or loan offers in the mail. Collection calls, bills, and notices from the IRS directed to your kid are, ahem, also major red flags.

After receiving any of these warning signs (or maybe before), you should freeze your child’s credit. The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018(Opens in a new window) says credit bureaus have to do this for free within one business day of a request. Parents can freeze credit for kids under 16; older kids can freeze their own. It’s called a Protected Consumer Freeze(Opens in a new window) for a minor, and it can’t be temporarily lifted once it’s in place. You should also report any fraud to local authorities, so they’ll have it on record, and also to the Federal Trade Commission via IdentityTheft.gov(Opens in a new window).

Before things go wrong, get started on credit monitoring for you and your kids. IDShield has a great family plan that covers you, a partner, and all your children. It costs twice as much as for an individual license, but it’s worth it as it covers all your household minor dependents.

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