As you can tell, fraudsters and scammers love to steal identities. If you're like me, you know more than one person whose social security number or personal information has been stolen and illegally used. Wise adults take precautions. We protect our credit card numbers, freeze our credit bureau accounts, never follow an email link without first independently verifying it, never give out our Social Security number unless we know for sure that it is lawful to do so, etc.

But what about your children? or 2021 study found that 1 in 50 children in the United States (1.25 million) were victims of identity fraud in the previous 12 months. And these are only the cases that have been discovered and reported! The average American family loses more than $1,000 when a child's identity is stolen.

How does this happen? First of all, Social Security numbers are easily sold on the dark web, including children's numbers. Fraudsters can then create an identity and, for example, take out loans under the child's number that they never pay back. Although lenders are not supposed to lend to anyone under the age of 18, many do not verify an applicant's age or are easily duped by experienced fraudsters. Even worse, the child and family often have no idea they've been benefited until years later, when the now-adult child tries unsuccessfully to get credit, receives debt collection notices, or is saddled with higher insurance. premium based on a poor credit score.

Another way scammers take advantage of minors is by registering an online account with the Social Security Administration in the child's name. An account can only be opened when a person turns 18, but if a scammer has your child's SSN and date of birth, be sure they will act quickly. If a fraudster gets there first, it's a long and arduous process trying to regain control of the account.

What do you do about this growing problem? Follow these “best practices” for your young children and educate your clients to do the same for theirs:

1. File credit bureau records for all minor children in the household. Here are pages from the three credit bureaus specifically about freezing a minor's report:

2. Once the children turn 18, instruct them to open their own SSA account. While you're on the subject, educate them about Social Security. Many do not understand what FICA withholdings are, how eventual payment amounts are calculated, or the value of these benefits in cases of disability, widowhood, or retirement.
3. Teach children about proper cyber safety tactics, especially those involving social media and online exposure. Many people are concerned about the elderly being victimized because they do not understand the Internet. However, young people are also easy victims because they trust the internet too much and regularly click on links without asking if it's a good idea. You can use this excellent series of educational videos published by Common Sense Education. Each video covers a different cyber safety topic based on the age of the child, and they are free to use. As they enter their teenage years, provide the same education about scams, phishing, and scams that you provide to your adult customers.
4. Finally, help children make wise financial choices. Instruct customers to consider adding their teen as an authorized user on one of the parent's credit cards, or possibly open a card in the parent's name specifically for the child's use as an authorized user. (The latter strategy makes it easier to determine what fees the child owes each month.) Doing this starts building their credit history and is a helpful way to introduce them to credit.
   For example, parents can set a limit on how much the child is allowed to pay each month. When the monthly statement comes, have the child pay the parent back whatever they charged and make that payment by the same date requested by the credit card company. If they pay late, charge them interest, just like a real card. If they abuse the privilege despite honest discussions and proper warnings, remove the card or remove their name.

In general, do everything you can to educate your children and your clients' children about finances and help protect them from identity theft. You will never regret taking these steps, and you may regret not doing so.

Amy Florian is the CEO of Corgenius, combining neuroscience and psychology to train financial professionals how to build strong client relationships through all of life's losses and transitions.