Must read: Child identity theft victims becoming more common

The Christian Science Monitor has a fascinating article online today about the growing number of children who are victims of identity theft. The article mentions Zach Friesen whose identity was stolen to purchase a $40,000 houseboat when he was only 7 years old. He didn't discover the crime until he was 17 and applying for his first job. Friesen now travels the country educating students about identity theft.

According to FTC records, about 5% of identity theft complaints involved victims under the age of 18. This equals about 500,000 children and is the fastest growing demographic for identity theft. Adults between 29 and 18 accounted for 29% of filings themselves. Child identity theft is especially dangerous because it usually isn't spotted until many years later. Some common types of child fraud include:

• Record theft – Children's Social Security numbers and birth dates are often used by schools, doctors, childcare providers, camps and sports teams. When these records are not stored in a secure manner, they can be easily stolen by an identity thief. Because parents do not check a child's credit reports or financial records often, a criminal may be able to misuse the stolen information for a long period of time before being caught.
• Tax fraud – There have been numerous cases reported in which an identity thief claims someone else's children on their taxes in order to obtain a higher refund. In most cases, the crime is discovered when a parent receives notification from the IRS that their children have already been claimed as dependents by someone else.
• New accounts – Credit cards and loans can be opened fraudulently using a child's stolen information. A common misconception is that the child's age is on their credit reports and should prevent accounts from being opened. While credit reports do include a birth date, this data is derived from information provided to creditors and can be easily faked. If an identity thief applies for credit using a child's Social Security number and a forged ID, the birth date listed on their application can become the official listed birth date on the credit report.
  
• Identity takeover – The complete take over of a child's identity is less common but more damaging crime. Working with unscrupulous "credit repair" artists, people with credit problems and illegal immigrants purchase the identity of a child and start using it as their own.  When this type of damaging crime occurs, it may be necessary to go through the difficult process of establishing a new number with the Social Security Administration. 

Protect your children from identity theft. Read a true story from Gerri Detweiler about identity theft impacting a teenager and read more about keeping kids safe from identity theft.