Sharing personal information online has made people vulnerable to identity fraud – a risk heightened during data breaches, like the massive Equifax breach that saw 143 million US citizens’ social security numbers lifted by hackers.
It’s hard to picture a cyber criminal going after a child’s information and yet, they are often the targets of identity fraud, according to the 2018 Child Identity Fraud Study produced by Javelin Strategy & Research. Last year, this type of fraud affected over a million children in the US and led to $2.6 billion in losses, with families $540 million out of pocket.
“What criminals do is they take the social security numbers of children and they use those to establish a credit report by using what’s usually a fake name, a date of birth that doesn’t match, and a different address,” said Al Pascual, senior vice president of research, and head of fraud and security at Javelin. “Subsequently, they will take on new products, services, and lines of credit to make that identity look substantial so that over time, they can get access to better products, better services, bigger lines of credit – run up the tab, in essence.”
No-one is too young to be a victim of identity fraud. The report, which was sponsored by Identity Guard, revealed that 66% of child ID fraud victims are under the age of eight, while 20% are under the age of 12. Data breaches are particularly harmful for minors, who are essentially “blank slate” targets.
“The child’s identity is tailor-made because there’s no history associated with it, until there is,” said Pascual.
The digitization of how people interact and do business has made everyone more vulnerable to identity fraud. Something as simple as opening a new account online, for example, has made it easier for ID fraud to be committed.
“Before that, it just wasn’t practical for a criminal to take all of these different identity elements and try to walk into a bank. They were going to have more success using a real identity than something like this,” explained Pascual.
It doesn’t help that kids today are often no different than adults with their use of social media.
“In this day and age, children have unprecedented access to many online devices, mobile devices, computers – just technology, period,” said Melba Amissi, SVP and chief risk officer at Identity Guard. “By interacting and engaging with those technologies, they are actually exposing a lot of sensitive information.”
Instructing clients to scrutinize medical bills or any other types of billing that contains sensitive information is one way brokers can help in the fight against fraud, recommended Amissi. Insurance products can also help in mitigating this risk.
“It’s not uncommon for policies to include things like identity theft restoration or identity protection services. There are a number of services on the market that also offer coverage to families, rather than just children,” said Pascual. “Depending on the services that they’re offering, that might be an opportunity for [brokers] to offer additional value, knowing that this is really becoming more of a problem at the end of the day.”
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