Stolen innocence: Child identity theft

Gabriel Jimenez was robbed of his identity when he was 12. Now a recent college graduate, he's been financially crippled by the dilapidated credit the thief left behind. He avoids credit and lenders, fearing high interest rates. He's attempting to get his credit report corrected, Social Security number changed and law enforcement's help. (Read more about his story.)

David Date of Santa Clara, Calif., discovered the misuse of his Social Security number a couple of days before New Year's in 2004, when he was 17.

He was attempting to open a checking and savings account at a Wells Fargo branch. The representative put Date's name, address, phone number and Social Security number into a computer. But something was wrong.

"They said, 'Are you sure this is your Social Security number?' I said I was absolutely sure," Date says. He went home to get the card.

"The banker told us that there was another Social Security number under a different person's name and suggested that we go to the police," Date recalls.

He and his father learned the person who misused Date's Social Security number had opened accounts at a Wells Fargo branch in Glendale, Calif. Date filled out a police report, but his father says nothing came of it because the crime was in another jurisdiction.

Meanwhile, Date was able to open an account under the same Social Security number. Letters were sent to the man also using the number to see whether he could present the Social Security card, but he didn't respond, so the bank terminated the account.

"It was total blind luck that I found out through that bank," says Al Date, David's father.

Debating the significance

One of the three credit major bureaus has observed a rise in complaints. One even has a special e-mail address for inquiries and to report problems.

"We have established childidtheft@transunion.com because of the growing problem," says Diane Terry, the senior director of the Fraud Victim Assistance Department at TransUnion.

However, some federal officials say the number of people complaining is still small.

"While child identity theft is a very serious issue, it is not occurring at any significant rate," FTC spokeswoman Betsy Broder says.

Jonathan Lasher, the deputy chief counsel to the inspector general of the Social Security Administration, says cases of misuse of children's numbers are seen from time to time but not at a dramatic rate. Others disagree.

"We're only seeing the icing on the cake," says Paul Stephens, a policy analyst at the Privacy Rights Clearinghouse. "There can be a very long time frame between identity theft and discovery, particularly with children."

Former New York Sen. Hillary Rodham Clinton acknowledged the danger to children in a statement issued after she introduced two proposals in Congress to give consumers more of a say in how companies buy, sell and market their personal information, and to provide more protection for consumers who have had their debit cards or card numbers stolen.

"Identity theft and the theft of our personal information is out of control," Clinton wrote. "No one is safe, not even kids and young adults, as identity thieves carry out electronic muggings that can cost people cash and their credit records."

What's being done?

The FTC is taking steps to inform young people about credit through an education campaign. According to Crane, the federal agency has been distributing educational materials about prevention and recovery to teachers and other community leaders.

The Identity Theft Resource Center is working with lawmakers in an attempt to forward a proposal that would create a list using birth records of all Social Security numbers and birth dates. The list would be provided to repositories, which could not sell, distribute or use it for other purposes, according to the center's testimony before the House Ways and Means Committee in 2003.

Credit applications submitted with the Social Security number of an individual on the list would be investigated. Once a child reached adulthood, the information would be deleted.

This article was reported and written by Brigitte Yuille for Bankrate.com.

Updated Feb. 3, 2009

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