Does your kid have 100k in debt – child identity fraud

Does my two-year-old have $100k in debt? – Stealing minors’ identities

Yes, they have cute innocent faces and can’t even spell their name, but they could be accumulating thousands of dollars in debt.


Happy 18th, kid – BTW, you could be bankrupt

In 2017 a total of one million kids were victims of identity fraud according to the 2018 Child Identity Fraud Study by Javelin Strategy & Research.

Data breaches are providing more than enough data to steal an identity, but that information is only valuable until the owner finds out and informs the authorities. What if you can steal the identity of someone who will not find out until they turn 18 or 19? That’s even better.

Imagine you are given a blank sheet of paper to write your name, address, and how good your credit is. Your answers won’t even be questioned so, you choose. This is exactly what a minor’s credit looks like to cybercriminals. Bad actors have 18 years to use a kid’s information until they become adults; that’s plenty of time to curate and age a credit bureau to borrow big bucks.

“It can’t be that easy”

Sadly, it can. Let’s say Bob – our recurrent imaginary fraudster – is bankrupt and he really, really needs to buy a water motorbike – don’t judge him. If he asks for credit he is obviously going to be declined so he thinks of another option. As he looks out the window he sees his neighbor’s two-year-old picking daisies and realizes he knows all that kid’s basic info: date of birth, name and last name, and street address.

In Canada, no financial institution can force an applicant to provide the SIN number for credit, so Bob is safe – but even if he had to provide one, he could use the child’s inactive SIN ( for Canada) or SSN (for the U.S.).

And the scheme begins:

 – Bob applies for credit at any prime or subprime institution expecting to be declined – because the credit bureau is blank – but now he has a credit bureau to work on.

 – He starts making this new identity legitimate by registering a phone number under the child’s name, applying for reward cards, and even creating a social media profile – in case creditors want to search for him online.

 – He goes to a bank and gets a secured credit card. To build credit he just has to spend a few bucks a month with that card and pay them back monthly.

 – Fast forward to a year or so later, when the credit has aged, and Bob can apply for an unsecured credit card or line of credit, for instance. This gives him enough money to buy – almost – all the water motorbikes he wants.

Imagine he does this with not just one kid, but tens of them. Most fraud is organized and acts in batches, targeting groups of victims to make the highest profit with the least investment.

Kids nowadays…

Total fraud against kids in 2017 amounted to $2.6 billion and more than $540 million out-of-the-pocket costs to families, according to Javelin’s report. Additionally, 40% of minors who found out their data was breached became victims of fraud, versus 19% of adults in the same situation.

What can you do?

If your kids are minors, start by checking their credit bureau at least once a year, to make sure no one is using credit under your offspring’s name. If you receive mail from retailers under your kid’s name don’t just dismiss it as junk, a fraudster may have signed them up to legitimize that identity and – for some amateur reason – used your mailing address.

Catching identity theft early will give you more time to take steps to fix it before you kids come to age and want to buy something with credit – let’s just hope it’s not a water motorbike.

Related to this post: PII And The Impact of Exposure – When Beans Are Spilled All Over