Your children may not have taken out a line of credit, a car loan or a mortgage, but it’s worth checking their credit history anyway.
All parents should ask to see a credit report on their kids when they turn 16 as a way of finding out if they’ve been targeted for identity fraud, the U.S. Federal Trade Commission said last week.
It’s a good idea for Canadian parents to do the same, says John Russo, chief privacy officer of Equifax Canada, a credit rating agency. Children are vulnerable to identity fraud because they have many years of not having any credit activity of their own:
“If you steal a two year old’s social insurance number and name and address, you can do a lot of bad things over a long period of time as a criminal, and it won’t be realized until it’s too late.”
“By the time they hit the age of majority, they will already have collections against them, lines of credit and credit cards maxed out and not paid, they will have an inability to get new credit, and it will take a while to rehabilitate their good name.”
Credit reports can be ordered free by mail or in person, but a fee applies online.
Criminals can use a variety of strategies, Russo explains. One is to pair the child’s real SIN number with a fictitious identity. Another is to pair the child’s real SIN and real name with an altered birth date:
“The fake birth date would make you look like you are at the age of majority. If it’s never been used before, and it’s not in the lost and stolen SIN database, nobody would trigger to the fact that that individual was not really that individual, and they were, instead, a fraudster pretending to be that child with that name, address, date of birth, but the date of birth has changed.”
WATCH: A Vaughan man has been arrested and accused of using mail redirection to rack up $10,000 in false purchases. Mark Carcasole reports.
There is no central database that creditors can use to check a loan applicant’s SIN number against their birth date, Russo says.
It’s important for the fraudster that the stolen SIN number is real, since their validity can be checked online. A real SIN number belonging to someone who isn’t having credit checks run on them is ideal, which is why children and teens have become vulnerable to identity theft.
Earlier this year, a survey found that millennials were far more likely to have been the victims of fraud than other generational groups. Equifax, which paid for the survey, linked it to the dark side of digital connection — the more people connect in digital space, the more vulnerabilities are created and the more passwords there are to remember.
Unlike in the United States, people in Canada don’t have credit files before adulthood. But just because there shouldn’t be a credit file associated with your child’s SIN number doesn’t mean there isn’t.
Children and teens don’t need social insurance numbers until they start to work and file tax returns, except that they will need one to be a beneficiary of an RESP.
WATCH: Edmonton police Sgt. Steve Sharpe provides tips on how to protect yourself from becoming a victim of financial scams, telemarketing deals, and online identity theft fraud.