FTC Testifies on Children's Identity Theft

The Federal Trade Commission today told the House Committee on Ways and Means Committee Subcommittee on Social Security that, “Protecting consumers – especially vulnerable consumers such as children – against identity theft and its consequences is a critical component of the Commission’s consumer protection mission.”

Delivering the Commission’s testimony at a field hearing in Plano, Texas, Deanya Kueckelhan, Director of the FTC’s Southwest Regional Office, told the committee that millions of consumers are victimized by identity thieves each year. She said that the cost and prevalence of identity theft have caused the FTC to devote significant resources to combating the problem, acting aggressively on three fronts: law enforcement, nationwide complaint management, and education.

The testimony details some of the FTC’s initiatives to combat identity theft. For example, since 2001, the Commission has brought 34 law enforcement actions against businesses that failed to take reasonable steps to protect sensitive consumer information that they maintained. In one such case, the FTC alleged that ChoicePoint, Inc., sold sensitive information, including Social Security numbers in some cases, about 160,000 consumers to data thieves posing as ChoicePoint clients. In many cases, the thieves used the information to commit identity theft.

In addition to law enforcement, the FTC collects, manages, and analyzes identity theft complaints in order to target its education efforts and assist criminal law enforcement authorities. The FTC manages the Identity Theft Clearinghouse, a secure online database of identity theft-related complaints, the testimony states. The Commission makes the Clearinghouse data available to over 2,000 American and Canadian federal, state, and local law enforcement agencies who have signed confidentiality and data security agreements.

According to the testimony, the FTC and its partners have provided identity theft training to over 5,400 state and local law enforcement officers from over 1,770 agencies, and the agency also makes available a wide variety of consumer educational materials - including many in Spanish - to help consumers deter, detect and defend against identity theft.

The testimony noted that in conjunction with the Department of Justice’s Office for Victims of Crime, the Commission recently hosted Stolen Futures, a forum where educators, child advocates, legal services providers, and government and private sector participants explored issues associated with children’s identity theft.

The forum panelists noted that while identity thieves can access SSNs from children’s records in schools, doctors offices and other sources, sometimes family members who have fallen on hard economic times use the identities of their children. In addition, several panelists noted that sensitive health and other personal information of children in foster care is often circulated widely within the schools and social services networks, leaving foster children particularly vulnerable to identity theft, the testimony states.

The testimony cites one recent survey of children enrolled in an identity protection service that found that more than 10 percent had loans, property, utility and other accounts associated with their Social Security numbers. Another study estimated that more than 140,000 instances of identity fraud per year are perpetrated on children in the United States..

According to the testimony, children’s SSNs are uniquely valuable because they lack a credit history and can be paired with any name and birth date. “In effect, a child’s identity is a blank slate that can be used to obtain goods and services over a long time period because parents typically do not monitor their children’s credit, often having no reason to suspect any problem.”
Therefore, “child identity theft is especially pernicious because the theft may not be detected until the child becomes an adult and seeks employment, or applies for student and car loans,” the testimony notes.

The testimony identifies steps parents can take to minimize their children’s risk of being targeted by identity thieves, including challenging requests for SSNs and other personal information, and understanding how and by whom the information being collected is going to be used.

The testimony notes that based in part on the information gained through the Stolen Futures forum, the FTC is developing, with the assistance of the Department of Education, a “back to school” alert to educate parents about the importance of safeguarding their children’s sensitive information, which will be distributed widely through local and community organizations.

The Commission vote to approve the testimony was 5-0. Copies of the testimony can be found on the FTC’s Website and as a link to this release.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.