Experts say children represent an emerging market for identity thieves who steal their Social Security numbers because they offer clean slates that can be used to commit fraud for years without detection. Many victims don't learn about the crime until they are young adults and find their credit in tatters as they are rejected for student loans, jobs and places to live.
Even as recent data breaches at large corporations have raised awareness about safeguarding consumer information, children's Social Security numbers are lying around little-guarded places not accustomed to fearing cyber-attacks -- like schools and pediatric centers -- constituting a goldmine for criminals seeking untainted identities.
If left unchecked, child identity theft poses risks not only to young adults, but also to the financial system by eroding confidence that loans will be repaid, experts say.
With increasing frequency, cyberthieves are hijacking those futures, tapping the pristine Social Security numbers of children for adult purposes, enabling undocumented immigrants to gain employment and people with tainted credit to secure credit cards, mortgages and car loans, experts say.
In the largest study on child identity theft to date, researchers at Carnegie Mellon University found that 10 percent of children were victims of identity theft, compared with less than 1 percent of adults.
Though not scientific, the study, which was published this spring, analyzed more than 800,000 records, including 40,000 belonging to minors, that were compromised by data breaches in 2009 and 2010. The information was provided by Debix, which sells identity theft services and offers free scans for parents who want to find out if a credit file exists on their child.
The stolen identities were used to purchase homes and cars, open credit card accounts, gain employment and obtain driver's licenses, the report found. The youngest victim was five months old. In one case, eight people are suspected of opening 42 accounts and incurring more than $725,000 in debt using a 17-year-old's Social Security number.
Many child identity thefts begin with a cyber attack, according to Bo Holland, chief executive of Debix. Hackers are now using computer viruses and botnets, or networks of infected computers, to search for specific documents on computers such as tax records and health records, which contain children's Social Security numbers, Holland said.