Patanisha Williams was a freshman at St. Mary’s College in Moraga when she got two nasty surprises: a $600 MasterCard bill, and a $1,700 American Express bill. Although both credit cards did belong to the eighteen-year-old Oakland native, neither debt was hers. After running a credit check on herself, Williams says she was alarmed to discover that years before, her own father had used her Social Security number and a shortened version of her name, “Pat Williams,” to run up all kinds of expenses. Her credit report featured charges for things no teenager ever would have purchased: furniture, for instance, and a car that had been bought and repossessed before she was even old enough to drive.
Unable to pay off the credit card bills, nor to pay her dorm fees without her father’s help, Williams left St. Mary’s for the decidedly less posh Laney junior college. Although her creditors offered to swallow the loss if she allowed them to conduct an investigation, she decided to spare her father the possibility of criminal charges. “They might have to prosecute, and I didn’t want to go through all that,” she says. “It was my father.” Instead, Williams took a $5-an-hour job at the YMCA to pay down the debt, and eventually reached a settlement with the credit card companies to pay half of what was owed.
If only it had ended there. Williams is now 31, and still struggles to repair the credit damage done in her youth. Because of unpaid expenses her father made in her name, she says, she has had trouble reopening an account with PG&E or the phone company. An auto repossession worth $6,000 stuck around until she was 29. Williams says she also discovered that her father falsely used the identities of some of her five siblings, including her mentally disabled younger brother, in whose name her father ran up thousands of dollars in bills and declared bankruptcy. Although the family did sue on behalf of the disabled brother, and the case was settled out of court, she says her father has never made any payments. The rest of the family, like Williams, chose not to prosecute. “He picks the ones who are too nice, who love him too much to do it to,” she says. “It’s not that we have the best credit; we don’t. It’s just that he knows he won’t get in trouble.” Williams’ father declined to comment for this story.
Welcome to one of the saddest chapters in the nation’s rising stolen-identity problem: child identity theft. The problem among adults is already widely known. The Federal Trade Commission estimates that 9.9 million people discovered their identities had been stolen in 2002, and this year announced that the East Bay ranks sixth in the nation’s metropolitan areas for ID theft. The FTC estimates that only 3 percent of the identity theft cases reported to the agency last year involved minors, but such cases are dramatically underreported, largely because of the emotional difficulty of reporting a relative to the authorities. Instead, victims of child identity theft are stuck with debts that haunt them for years after childhood. Many don’t even realize they have problems until they turn eighteen and apply for their first college loan, auto lease, or apartment rental.
Identity theft is a crime to which children are particularly vulnerable. “A child is an easy mark, because a child doesn’t have a way of checking his or her credit report,” says Mark Jackson, deputy district attorney in Alameda County’s High Tech Crimes Unit. By the time that child reaches eighteen and understands what a credit report is, the damage has been done ten or fifteen years ago. Since credit blemishes usually drop off a report after seven years, if the thief picks a young enough victim, they have a high chance of not being caught at all. Kids’ clean credit histories also make their identities highly desirable. “You’ve got clean credit because no credit has ever been established in your name. It’s a perfect mark,” Jackson says.
Linda Foley, executive codirector of the Identity Theft Resource Center, says these thieves are sometimes strangers: people who dive through pediatricians’ or pharmacists’ Dumpsters looking for kids’ personal information, surf the Web for Social Security numbers, or steal credit card offers, bills, or other financial papers out of mailboxes. However, she says the majority are parents or other caretakers with ready access to a child’s information. Often these older relatives are chronic offenders, Foley says, who need an endless stream of cash to feed a drug, alcohol, or gambling habit. In Williams’ case, she says that her father’s habit was shopping. “I used to go with my Dad shopping at different places and they’d be like ‘Your Ferragamos are in, in different colors,’ as if he was rich,” she remembers. “But we weren’t, and I knew something was wrong. So when the money ran out, he still wanted to continue the lifestyle.”
In some cases, Foley says, it’s hard to blame the parents. “Occasionally we see it as a single act of desperation,” she says. “Mom has ruined her own credit, the phone has been turned off, the gas and electricity are about to be, so she opens a new account using her child’s information because it’s clean. She needed it to pay the bills and put food on the table. I think we can all be sympathetic with that. But she’s no more likely to pay those bills off than she was her own.”
Another situation Foley has encountered are families in which the parents are illegal immigrants, but whose US-born children are entitled to Social Security numbers. The parents put the family’s bills in the names of the children, and although they pay all the bills on time, when the children reach adulthood and apply for their own loans, they realize their credit is already maxed out. “It’s a dilemma,” says Foley. “They don’t want to turn their parents over. Their parents have been wonderful parents, they provided for them, helped pay for their college so that they could have a future. But there’s one problem with it: They can’t use that future.”
Law enforcement agencies and privacy rights groups say that child ID theft is hard to report. Credit agencies require kids to submit a police report before they’ll wipe their records. “It can be an emotional situation,” says Jordana Beebe, spokeswoman for the Privacy Rights Clearinghouse. “You have a family member who doesn’t want to rat out another family member, and subsequently they’re left holding the bag for these credit card debts. And credit card companies can be very vicious about that. … If you say ‘I want to talk it over with my family member,’ you are in essence accepting responsibility for that account.” When the case does go to court, Jackson says, “you get into issues with the competency of a child to testify as a witness.” That’s not to mention the many custody and financial dependency questions raised when the victim is still under age eighteen.
Credit bureau policies also can make it difficult to prevent child identity theft before it happens. In those cases in which a minor or adult guardian suspects possible identity theft but lacks definitive proof, the three major credit bureaus refuse to block access to a child’s report because, in theory, no one under eighteen is supposed to have one. Once the damage has been done, California offers its residents access to a unique “freeze” program, in which only consumers and their preexisting creditors can access a credit report. But while this is a good idea for adults, it doesn’t work so well for kids because parents still have legal access to their children’s accounts.
There’s also not much to stop determined parents from opening new accounts in their kids’ names if the child manages to have the old ones canceled. Joanna Crane, manager of the FTC’s identity theft program, says creditors aren’t required to check when applicants’ Social Security numbers were issued, nor the age of the applicants. “They may or may not,” she says. “Every company has different procedures and there are algorithms you can run to ascertain when that Social Security number was issued, which would give you a suggestion of the probable age of the bearer, although certainly not everyone in the US has had a Social Security number since birth. But not every creditor or utility would make the effort to do that sort of research, so while it’s available, it’s not routine.”
Beebe also blames the ease of committing credit fraud on the voraciousness of the credit industry, which she says processes about ten thousand new applications every hour. “Obviously they don’t want to slow up that process and are willing to take on these fraudulent applications as the cost of doing business,” she says.
Others say child ID theft will continue to grow because of the ease of applying for credit cards. According to Chris Hoofnagle, associate director of the Electronic Privacy Information Center, about five billion preapproved credit offers are mailed out to Americans every year. Considering that there are only about 116 million households in the country, that creates quite a snowdrift of unexpected, easy-to-steal mail containing sensitive personal financial information — and these offers are often mistakenly mailed to children. “The hub of the problem is that even people who have no credit cards can be victims of identity theft because there is such a zeal, such a drive, to issue credit,” Hoofnagle says. “There are more offers of credit now because credit is no longer granted on a take-it-or-leave-it basis. If you apply for credit, chances are you’ll get it; the question is, what rate will you pay? So someone with bad credit who ten years ago might not have gotten that new card, today they’ll get that card but the interest rate will be 24 percent or it will be secured.” All of which suits an ID thief just fine, since he doesn’t intend to pay anyway.
Because child ID theft is such an underreported phenomenon, there are no official numbers on how fast it’s growing. Foley offers a thumbnail sketch based on the e-mails she gets every year requesting help for child ID theft victims: there were only seven in 2001, twenty-five in 2002, and more than ninety in 2003. But she stresses that this is only the merest sliver of the cases actually out there. She expects those numbers to grow as public awareness about child ID theft increases, and as the children born in the credit-happy 1980s and 1990s begin to reach adulthood and request their first credit reports.
For people such as Williams, it can be a long road to repair the damage to their credit, but she’s eager to get her life back on track again. She’s back in school, studying media communications and photography at Laney. She and her son moved in with her mom. She says they struggle financially because of her debts and her inability to reopen her utility accounts, but says she has resisted the temptation to solve her problems by putting her own bills in her son’s name. “Had it not happened to me, I probably would have done it,” she admits.
As for the debts made in her name, Williams says she has paid off slightly less than $3,000, and after more than a decade, the rest have finally dropped off her credit report. But to her, having a clean report is not the same as healing her relationship with her father. “We could be father and daughter again,” she says. “That’s my ultimate goal.”
How to protect your identity
Some tips for keeping your credit clean.
- Don’t carry your Social Security card; keep it in a safe place.
- Make sure that any identification cards you carry – such as those for your school, doctor’s office, or video store – don’t use your Social Security number as an identification number. If they do, ask the card issuer for an alternate number.
- Don’t respond to solicitations by mail or phone for your personal information. Scammers often pretend to be the phone company or other businesses calling to “verify” customers’ information.
- Don’t put your Social Security number on your résumé.
- When applying for a job through an Internet posting, make sure that the business actually exists. Don’t give out your personal information for “background checks” to employers you haven’t met.
- Don’t reveal personal financial information on your blog or through Web postings.
- Drop your outgoing mail into a locked mailbox; don’t leave it in the box on your front porch.
- Shred any bills, credit card offers, or financial information that you throw out.
- Check your credit report – if you’re under age eighteen, you should find that you don’t have one. If you believe you’ve been a victim of fraud, report it to the three credit bureaus, who must help you free of charge: Equifax 800-525-6285, Experian 888-397-3742, and Trans Union 800-680-7289.
Victims of ID theft can obtain additional information at IDTheftCenter.org
For information on California’s credit file “freeze” program: privacy.ca.gov/financial/cfreeze