America's Money: Parents Stealing Kids' Identities in Alarming Trend
Parents accused of racking up debt using kids' identities.
July 14, 2010 — -- Most of us know someone who has been a victim of identity theft. Most often, the perpetrators are strangers.
But there's a new trend emerging in the U.S. -- parents stealing their own children's identities for financial gain.
Larry Braziel Jr., 27, is a young man who already wants to put the past behind him.
"To this day, I am still working on cleaning up my credit," Braziel told "Good Morning America."
CLICK HERE for Mellody Hobson's Web Takeaway on how to spot red flags that your kids may have had their identity stolen.
When he was 19 years old, Braziel received a call from a collection agency, demanding money he didn't even know he owed. A full credit report revealed that he was already over $100,000 in debt.
"There were just numerous things, including a $41,000 mortgage, that was on my credit file, and I had never owned a house, ever," he said.
Braziel said he eventually discovered that his father had used his social security number to open up numerous lines of credit in his name.
"It's extremely easy to do, especially when the father and the son have the same name," he said.
Identity theft is on the rise, experts said, especially during these tough economic times. More than 11 million people were victims of identity theft last year, and 13 percent of the crimes were committed by someone the victim knew. More troubling: six percent of the thieves are related to the victim.
"Parents are privy to children's information and if they're desperate enough, or if they're that type of person -- they seem to have no reluctance using their children's social security number," said Linda Foley of the Identity Theft Resource Center.
And like many victims, Braziel did not turn his father in for the alleged theft.
"Child identity theft is an emotional rollercoaster," Foley said. "They go through a feeling of 'What a horrible child would I be to file a police report against my mother or my father?' But it's tough love... Who is going to stop this person if not you?"
When it comes to victims of the theft, age doesn't matter since nothing ties a Social Security number to an age unless the creditor asks for proof of age.
One danger is that children don't even realize their identity has been stolen until they are old enough to attempt to use their credit to get a credit card or apartment.
Identity Theft by Your Parents: What You Can Do
If you're a victim of identity theft there are several important steps to take once you realize it's happened.
Contact the three major credit agencies -- Equifax, Experian and TransUnion -- and tell them about the fraud.
Report it. This is a crucial step to limit your liability. Not only will reporting the theft provide important legal protections, it will also put a seven year fraud alert on your credit report.
First, file an Identity Theft Report with Federal Trade Commission. This simple form can be found on their website, FTC.gov. Print out two copies of the completed form -- one for your files and one to bring to the police when you file that report.
As difficult as it may be to file a police complaint against a family member, it must be done. Your credit future is at risk. With a damaged credit history, your chances of opening a credit card account, applying for student loans and getting a mortgage could be in serious jeopardy.
When this paperwork is complete, send a copy to the three credit agencies with a letter telling them what information is fraudulent.
Monitor your credit reports regularly to make sure no further fraud is occuring.
Finally, contact the fraud investigator at the credit card companies and deliquent creditors on your credit report so they can open up their own investigations.
Even if the perpetrator is a family member, the worst thing you can do is nothing, since bad credit can hurt you for years.
Web Extra Takeaway
Are there any red flags that a parent should look out for if they suspect a relative is using their children's identity?
Over 50 percent of identity theft victims do not know how their information was compromised. However, there are red flags that you can look for to make sure your child is not victimized by others. Some common signs include calls from collection agencies for your child, receiving pre-approved credit card offers in your kid's name, and getting bills in your child's name. If you see any of these red flags, you should follow the steps we have already talked about.
Should you change your Social Security number?
One of your first impulses might be to change your social security number, but the benefits and costs depend on what stage of life you are in. If you are young and do not have much of an established credit history, then it might make sense to change your Social Security number. However, before changing your number, you should check with your school to ensure your student records will not be wiped out.
If you are any older, you may want to rethink changing your number. When you get a new Social Security number you actually wipe out your past credit history -- good and bad -- which could prevent you from getting a loan, opening a bank account, or even getting a job. So if you have an extensive credit history, it is not a good idea to change your number.
The process for changing your number is quite complex and the Social Security Administration (SSA) usually discourages it. In order to get a new number you have to prove to the SSA that you have been "disadvantaged by Social Security misuse." This means that you have had financial or personal hardships in the last year because of the misuse of your Social Security number.
If you would like to change your Social security number then you should go to the Social Security Administration website at www.ssa.gov.