Jaleesa Suell, a senior at George Washington University in Washington, D.C., recently tried to establish credit by applying for a modest student credit card. To her surprise, she was turned down. She later learned that someone had used her Social Security number to get a credit card in South Dakota, which the thief later defaulted on. Suell, a former foster child who overcame many obstacles on her path to college, now faces the daunting task of clearing off the blots on her credit record. "I've worked so hard to get here, but then this pops up. It's really frustrating," she says.
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Increasingly, children have become targets of identity thieves. In a study published recently by Carnegie Mellon University, identity checks on 42,232 U.S. minors revealed that 10.2 percent had had their Social Security number used by someone else, 51 times the 0.2 percent rate for adults.
Since children don't tend to file for credit until they are older, the problem can go undetected for years. According to Bo Holland, founder and CEO of AllClear ID, an Austin, Texas, company specializing in identity theft protection, credit bureaus don't have access to federal Social Security records and so can't determine if a thief is making a first-time—and fraudulent—use of a stolen number in a credit application. The bureaus' databases make the assumption that the correct name is associated with the correct number.
Credit bureaus also do not yet employ tools that can determine whether multiple people with different names are misusing the same number. AllClear ID recently studied the credit reports of 381 children. Despite their being known fraud victims, Holland says, "99 percent of the cases were not detected" when checks were run through the three national bureaus, Equifax, Experian, and TransUnion.
Recently, the Federal Trade Commission held a forum where various nonprofit organizations and firms, including AllClear ID, briefed government officials on the issue. One proposed solution was the creation of a "1710 Database," which would likely be administered by the Social Security Administration with state motor vehicle agencies and the three credit bureaus being the customers. The database would include the birthdays, names, and Social Security numbers of all children up to 17 years and 10 months old. Every credit or job application could be run against the list, catching potential fraud before it happens.
While broader solutions are being developed, credit bureaus have begun taking other steps. For example, TransUnion teamed up with AllClear ID to create a free tool for parents to check the status of their children's identities. And Experian is working with the Identity Theft Resource Center. If your family is victimized, these sites as well as the firm Identity Theft 911 can connect you with the help needed to recover your stolen identity.