Kids are in the crosshairs of the latest trend in identity theft and credit card fraud — and there may be little parents can do to protect them.
In this latest scheme, hundreds of online businesses are using computers to find dormant Social Security numbers, in most cases these are numbers assigned to kids who have not yet used them to build up a credit history. These businesses sell the numbers under another name to help people establish phony credit and run up huge debts they will never pay off.
Of course, they don't advertise the numbers as "Social Security numbers." Instead, these numbers are called CPNs or credit privacy numbers. A "clean" CPN is a number that has been validated as an active Social Security number and is not on file with the credit bureaus. The most likely source of such numbers? Children.
Some companies that sell the numbers have lavish, high-tech websites. Others run no-frills ads on sites like Craigslist.
According to the Associated Press, it's not clear how widespread the fraud is, mostly because the scheme is difficult to detect and practiced by fly-by-night businesses. But there are currently more than 25 percent of consumers, or nearly 43.4 million people, with poor credit scores who are marked as poor risks for lenders. Experts think the emerging trend will almost certainly get worse before it gets better.
The frustrating thing about this is that it seems there is little that parents can do — short of constantly checking with the credit bureaus to see if there is a credit file associated with a child's Social Security number — to protect kids from this kind of fraud. According to the Social Security Administration, there are no specific tools for safeguarding a child's Social Security number.