Upon hearing the words “identity fraud,” some may think it is a crime that only targets adults. That, in turns out, is far from the truth.
According to a new report by Javelin Strategy & Researching, a research-based advisory firm in digital and finance, over one million children were victims of identity theft in 2017 — crimes which resulted in US$2.6 billion in total losses, with families paying over US$540 million out of pocket.
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About two-thirds of victims were found to be under the age of eight, a statistic which shows that these crimes can happen even before children start using the internet, the report says.
While a child’s stolen identity can be perpetrated by anyone, researchers did find that in about 33 per cent of incidents of child identity theft, the ID was stolen by a family friend.
Researchers recommend that parents do a few things to prevent identity theft from happening to their child.
- Teach your children how to protect their identity online when they are young. These skills will also help them out in adulthood and reduce their risk of being a victim early on.
- Pay attention to bullied children. In many cases, researchers say fraud and bullying are not carried out by the same person, but come about from the same “underlying vulnerabilities.” For example, oversharing personal information in an anonymous environment. They are also likely to come across people who target them emotionally or financially, and may be more vulnerable to fraud as they may be taken advantage of when they seek friendship.
- Keep physical documents secure.
Researchers based their report on information collected from an online survey of 5,000 people between August and September 2017 in the U.S. who either live with – or once lived with – a dependent minor in the past six years.
So what should Canadian parents take away from this report?
Statistics on childhood identity theft in Canada are scarce, but according to an ETF Capital Management report, 32 per cent of Canadians have been victims of some form of financial fraud.
In fact, more than seven in 10 people surveyed by the Chartered Professional Accounts (CPA) Canada said they were concerned about identity theft and about four in 10 believe their personal information has been compromised.
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Personal finance educator and consumer advocate Kelley Keehn, who wrote a fraud protection guide for the CPA in 2014, explains that while some kids won’t have a credit file or social insurance number (SIN) until they’re 18 in Canada (or unless a Registered Education Savings Plan, a.k.a. an RESP, has been opened in their name), children still make for perfect targets of identity fraud.
This is due to a few reasons. First, it would take a long time for a child or parents of a child to realize they have been the victims of identity fraud. Second, children don’t have a credit file and their financial records are clean. Third, some parents don’t think twice about giving up information on their children, whether it’s when signing them up for sport teams or revealing sensitive information (like birth dates) on social media.
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“It’s a heinous crime for an adult, but especially for a child,” Keehn says. They might only come to the realization of what happened when they turn 18, apply for their first cellphone or credit card, and get declined, she says. “You have to clear your own name when it comes to an identity theft. A lot of people do not have the confidence and the understanding on where and how to do that. … It can be incredibly emotional devastating.”
While identity theft can impact children financially in the future, not many think about other ways this can affect their child — for example, instances in which a crime is committed. A stranger may use a child’s identity to commit a crime, thus creating a criminal record in that child’s name, Keehn warns.
Other ways a child’s stolen identity can be used can be to obtain passports, receive government benefits and open new bank accounts, among other things, the RCMP details.
Should parents want to avoid this happening to their children, or need help in cleaning their child’s name, Keehn suggests parents be vigilant.
“Make sure you can sit down with someone like a certified financial planner who’s going to help walk you through this — like help you set reminders,” she says. “Who should you check with to see if your child has a credit report? That would be Equifax and TransUnion.”
Also, make sure all your important documents are locked away somewhere safe, she adds.
“Your SIN is such a key component to your identity that Service Canada does not even issue SIN cards anymore,” Keehn says. “But if you have a teenager and if they have a SIN card, do you know where that is? If you don’t know where that is, then that’s a red flag.”
Next, don’t share any of your child’s personal information online, and be aware of the information some places are asking you to provide about your child. For example, your child’s sport team should not be asking for their SIN.
It’s also not a bad idea to think about identity theft insurance, Keehn says, especially if you feel like you or your child’s information might have been compromised.
Should you suspect yours or your child’s identity has been stolen, the RCMP advises you contact your local police office and file a report, followed by contacting your bank and credit card companies. Next, contact both Equifax and TransUnion, then inform the Canadian Anti-Fraud Centre.
For more tips on preventing identity fraud and theft, or for fighting it, visit the RCMP website here.
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