During a recent chat with my teenage nephew, he mentioned that a friend of his couldn’t get a small car loan even though she had a steady job. When she asked the bank about the reason, it turned out she’d already defaulted on several other loans as well as a credit card.
But here’s the problem: She’s never even had a bank account, much less applied for loans or credit. And to make matters worse, the identity theft was traced back to her mother.
An isolated incident? Unfortunately not. Even if you’re not old enough to file your first tax return, child identity theft can be a serious threat, and it may take years to clear your name if you’re victimized. For kids and teens, that means having a black mark on your credit just when you’re trying to get your first job or work toward a driver’s license.
Besides being a difficult problem to work through, you could find that your identity thief is someone close to you. For example, one 16-year-old Reddit user wrote that his grandfather took out 15 credit cards in his name, with a whopping $22,000 in debt as a result. By some estimates, family members account for 30 percent of all identity fraud.
The problem makes it challenging to know whom to trust. However, it’s important to take action if you suspect it’s happening to you. If you’re under age 18, here are some signs that you might be a victim of child identity theft:
- Bills, collection notices, and bank notices come in the mail addressed to you.
- You start receiving numerous credit card offers or other loan materials.
- Bill collectors or loan officers start calling you.
- You have trouble opening a bank account.
In general, if something seems suspicious, then it’s worth checking out. Don’t ignore any strange calls or letters coming your way, because they could be red flags when it comes to family fraud.
If any of these signs sound familiar, it’s time to dig a little deeper. While credit reporting agencies don’t knowingly maintain credit reports on minors, a credit report may be created if someone uses your Social Security number or other information.
Start by requesting a copy of your credit report from the 3 major credit reporting agencies; Experian, Transunion, and Equifax. If you discover that someone has opened credit in your name, you can talk to the agency’s fraud department and get a freeze put on your credit. That will halt identity thieves from taking on more debt with your details.
If you find evidence that you’ve been a victim of identity theft, it’s a good idea to file a police report, since that creates a record that helps to clear up your credit standing. If a family member is involved, this can be a tough thing to do. But it may be necessary to stop the theft and prevent other family fraud attempts.
Image courtesy of Flickr user Nadja Tatar.