Parents Are Stealing Their Children’s Identities to Access Debt—and Destroying Their Kids’ Credit Scores in the Process

In the shadows of the digital age, an unsettling form of betrayal is emerging, one that pits family members against their youngest and most vulnerable. Imagine discovering that the very people tasked with safeguarding your future have instead plundered it, leaving a trail of financial devastation in their wake. This betrayal isn’t driven by strangers lurking in cyberspace but by those who share your home and life—parents exploiting their children’s identities.

As shocking as it may seem, a growing number of parents are turning to their children’s pristine credit histories to circumvent their own financial shortcomings, setting up a legacy of debt before these young lives even begin to unfold their own economic wings. What drives a parent to steal their child’s identity, and what are the lasting repercussions on a young person’s financial status?

What Is Child Identity Theft & How Does It Work?

Child identity theft involves the misuse of a minor’s personal data, typically their Social Security number, to commit fraud. This can lead to the opening of credit accounts, securing loans, or even purchasing properties under the child’s untarnished credit profile. Such activities can have long-lasting implications for the victim’s financial health and credit score.

A study by Carnegie Mellon University’s CyLab has shed light on the prevalence and severity of child identity theft. It analyzed over 40,000 children’s identity files and found that approximately 10% had their Social Security numbers misused. Children are a staggering 51 times more likely to be victims of identity theft compared to adults, indicating the attractiveness of their unused and therefore “clean” credit profiles to potential fraudsters​.

Alarmingly, the perpetrators of this type of identity theft are often the people who should be the most trustworthy — the child’s family and friends. In many cases, parents or close relatives exploit their easy access to the child’s personal information. This breach of trust can go undetected for years, often only coming to light when the child grows older and encounters issues when applying for credit or loans for the first time​.

Child identity theft by a parent often begins with the misuse of the child’s Social Security number (SSN) and other personal information. Parents, having legal access to their children’s documents, can easily manipulate this data for fraudulent purposes. They may use their child’s clean credit slate to open credit accounts, secure loans, or even register for government benefits.

Since children typically do not use their SSN until they reach adulthood, their identity presents a clean opportunity for those desperate to bypass their own poor credit history. For instance, parents might apply for credit cards or loans under their child’s name, accumulating debts without the child’s knowledge. This misuse can remain undetected until the child grows older and encounters issues when applying for their own financial products, such as student loans or housing, which then reveals a damaged credit history.

Not only does it affect the children’s future financial opportunities, but it also imposes a significant emotional burden, especially when the identity thief is a parent or close relative. Victims often struggle with feelings of betrayal and have to undertake complex legal processes to clear their names and repair their credit​.

‘I Was Devastated’: Cases of Child Identity Theft

Parental identity theft is a severe and often hidden crime that can have long-lasting effects on children’s financial and personal lives. Two cases highlight the extent and complexity of this issue.

Laura Oglesby, a 48-year-old woman from Missouri, used her estranged daughter’s Social Security information to impersonate her and enroll in college. Oglesby not only managed to secure a driver’s license in her daughter’s name but also obtained financial aid, accumulating $17,521 in debts to Southwest Baptist University and other charges under her daughter’s identity. This elaborate deceit allowed her to live as a younger version of herself, even to the extent of having boyfriends who believed she was in her twenties. Oglesby’s actions, which the police described as having “basically just ruined her daughter’s credit,” led to her pleading guilty and now faces up to five years in prison without parole.

Another distressing example comes from an anonymous individual who shared their story online, detailing how their mother stole their identity to manage financial crises exacerbated by the 2008 economic downturn and a devastating family home fire. This betrayal unfolded slowly, starting with small unauthorized withdrawals from a shared checking account and escalating to multiple credit cards opened in their name, leading to severe credit damage. The victim discovered the full extent of the fraud only when attempting to lease a car after college, a process that unveiled their ruined credit history.

“I was devastated. I had finally felt like my adult life was beginning, and I was on the path to financial freedom and independence, and it all came crashing down around me before I even got a chance to start,” they shared. Despite the enormous personal and financial strain, this individual worked tirelessly to repair their credit and financial standing, transforming a painful experience into a journey of personal empowerment and financial education.

These cases show the devastating impact parental identity theft can have on victims, often leading to ruined credit, financial instability, and personal betrayal.

Steps to Take if You Suspect Child Identity Theft

Child identity theft is a serious concern that can have long-term effects on a child’s financial stability. If you suspect that the identity of your or someone’s child has been compromised, there are specific steps you can take to address the issue and protect their future. Here’s a concise guide on what to do:

1. Check the Credit Reports.

Start by requesting a free credit report for your child from each of the three major credit bureaus—Experian, Equifax, and TransUnion—via AnnualCreditReport.com. You’re entitled to one free report per bureau every 12 months. If a credit report exists for your child, it’s a red flag since minors typically should not have a credit history unless they’ve been co-signed by a parent for an account.

Anyone who has a legitimate concern and necessary authorization can check a child’s credit reports. If you’re a relative or close to the family and suspect identity theft, you might need to discuss this issue with the child’s legal guardian to take appropriate steps.

2. Look for Warning Signs.

Be vigilant about certain indicators of fraud. These can include:

• Unexpected calls from collection agencies regarding bills under your child’s name.
• Credit card offers, bills, or government notices like tax or benefit issues arriving addressed to your child.
• Existence of a credit report in your child’s name.
• An increase in financial resources for a parent who has previously faced money troubles.

3. File a Police Report.

If you find any evidence of identity theft, report it to the police. This report is crucial when dealing with financial institutions to rectify the credit damage. It officially documents the crime and is often necessary for clearing fraudulent records.

Filing a police report can be done by anyone who has evidence of the crime, though having custodial or legal guardianship will facilitate dealing with law enforcement and financial institutions more effectively.

4. Contact Credit Bureaus.

A parent, legal guardian, or a person with court-appointed responsibility for the child can request the removal of fraudulent information from the child’s credit report. Provide them with necessary documentation, such as a Uniform Minor’s Status Declaration, to confirm that the victim is a minor.

Non-guardians may need legal assistance or permission from child protective services to take this action.

Prevent further misuse by freezing your child’s credit. This stops credit bureaus from releasing your child’s credit report, making it more difficult for identity thieves to open new accounts in their name.

5. Report to the Federal Trade Commission (FTC).

File a fraud report with the FTC either online at identitytheft.gov or by calling 877-438-4338. This site also serves as a comprehensive resource for managing the aftermath of identity theft.

Vigilance Starts at Home

Identity theft not only jeopardizes a child’s current financial standing but can also inflict long-lasting damage that complicates future endeavors such as securing student loans, buying a car, or renting a home. This form of betrayal erodes trust and can leave deep emotional scars. Therefore, it is imperative for parents to act as the first line of defense against such violations. By closely monitoring and managing their children’s personal information, educating them about the importance of privacy, and modeling responsible financial behavior, parents can significantly mitigate the risks of identity theft.

Moreover, in today’s digital age, where personal information is increasingly vulnerable, proactive measures such as regular credit checks and setting up credit freezes should be standard practice for protecting minors’ identities. These steps, coupled with vigilant oversight of unusual correspondences or transactions, ensure that children’s futures remain secure. The broader societal commitment to these protective measures not only upholds the integrity of individual family units but also fortifies the community against the pervasive threat of identity theft, preserving the opportunity for every child to build their own financial independence on a clean slate.