Years may pass before child identity theft is uncovered, typically when a child becomes an adult and accesses credit for the first time, buying a first car or applying for a college loan.
JEAN ORTIZ / Lincoln Journal Star | Posted: Sunday, November 25, 2007 6:00 pm
Annette Harmon knew about identity theft, but it wasn’t until about five years ago while reading an article that she really understood how children could fall victim.
Harmon, who lives in Seward but works in Lincoln, wondered if her ex-husband would try to use their teenage children’s information to open accounts.
After sending for their credit reports, she learned her daughter was in the clear — but her son had already racked up a civil judgment for not paying rent on a house.
He was 13 when it supposedly happened.
Harmon and her children are still picking up the pieces and dealing with problems that have since shown up in her daughter’s name.
Harmon’s ex-husband, meanwhile, was convicted on misdemeanor counts of criminal impersonation and earlier this year was sentenced to 45 days in jail.
It’s exactly the kind of story Jaimee Napp doesn’t like to hear.
Napp, founder of the Identity Theft Action Council of Nebraska, is helping Harmon and other victims and is working to raise awareness about a portion of personal finance that isn’t top of mind for many.
Exposing the problem is part of the challenge.
Many victims don’t go to police, including those who don’t want to incriminate a family member. Fewer yet report it to the Federal Trade Commission, which tracks fraud-related complaints, she said.
“We know we have an issue here, but we don’t know how bad it is,” Napp said.
Complicating the situation: Years may pass before that theft is uncovered, typically when a child becomes an adult and accesses credit for the first time, buying a first car or applying for a college loan.
“In maybe five to seven years we’ll find out the true impact to children,” she said. “We’re going to start seeing that more and more as children come of age.”
The FTC doesn’t single out theft of children’s information, but it does break down data by the age of the victim, which reveals that those under age 18 made up 4 percent of the 868 identity theft cases reported in Nebraska in 2006.
The numbers spike for the next age group — 18 to 29 — who made up 30 percent of reported cases in Nebraska in 2006.
National consumer credit bureau Experian teamed up with Gallup for a recent study, surveying 3,029 adults, including 880 who reported having children under the age of 18. They found 68 percent of responders knew little about child identity theft. The survey also revealed 72 percent acknowledged it would be “very easy” or “somewhat easy” to steal a child’s identity.
There are extreme cases of a thief using the information to acquire houses, boats or make other big purchases, but the motives aren’t always malicious, Napp said.
In some cases, financially struggling parents who’ve destroyed their own credit begin using their children’s information to cover living expenses, not necessarily thinking about the consequences.
“Maybe they don’t have enough credit to get the heat on,” she said. “… Their intentions are probably good.”
According to data from the Identity Theft Resource Center, nine out of 13 child identity theft victims responding to a survey said the thief was one or more parents or a stepparent. Seven of the 13 said the theft occurred before their fifth birthday.
Child identity theft can happen at any time of the year, though Napp said she can see how times of additional financial pressure could move parents to consider it. She has simple advice for parents in that instance, including those who find themselves cash-strapped around the holidays.
“Find another way,” she said.
The aftermath of child identity theft is no easy journey, Harmon says.
She has seen her children turned down for car loans, student loans and credit cards — all because of the poor credit they had no part in building.
“It’s called Bank of Mom,” she said. “Everything they’ve needed, I’ve financed and they’ve paid back,” Harmon said.
She has begun the process of freezing her children’s credit to prevent more damage. And she’s hoping, with Napp’s help, to clear the damage already done.
Napp hopes controls can be put in place to automatically prohibit credit for children until they come of age. But short of that, she intends to keep pushing awareness, to influence new legislation and to help victims put their lives back together.
“We want to give consumers a voice,” she said.
Reach Jean Ortiz at 473-7107 or jortiz@journalstar.com.