Most of you know that identity theft is a real problem complicated by today’s technology. But it’s not all about the cyber space. Identity theft has been going on for years in the real world. What many of you may not know is that children are attractive targets for these thieves. They are even more vulnerable than adults because a child’s social security number hasn’t been tainted by bad credit and the crime is often not discovered for many years.
One group that appears to be particularly at risk is foster children. These children, and their private information, pass through many hands. And when they are emancipated they often have to face this predicament without any family to help them. So, on top of many years of dealing with more losses than any child should ever have to suffer, they often have to deal with the loss of their identity as well, creating problems with school loans, car loans, and other credit issues. One foster child was tagged with his own father’s child support bill because his father used his son’s social security number when applying for a job. He got the job, his wages were garnished, and then he lost the job. The debt continued until the son ultimately had a $50,000 child support judgment against his credit. Any one who has ever had to deal with this problem knows what a horrendous task it is to get something removed from your credit report.
We don’t know exactly how many of these children end up with bad credit due to identity theft because many of them are never reported. The state of California finally recognized the problem and in 2006 a law was enacted intending to clear foster children’s credit records before they left the system. However, due primarily to limited funding, implementation of the law was delayed--and still is. In 2010 a pilot program was put into place in Los Angeles with some success. You can read the complete report here but one of the key findings included the clearing of 247 separate accounts from the credit reports of 104 foster children. The largest was a home loan of $200,000.
So what needs to be done? Federal legislation was reintroduced last month, the Foster Youth Financial Security Act of 2011, requiring annual credit checks on foster children. Perhaps this will help. These children have enough to deal with. They certainly don’t need to start their adult life with bad credit.