Credit Scars: Youngest Victims
posted by Alex Ferreras on May 8, 2012 in Credit
(Source: Mike Wagner and Jill Riepenhoff The Columbus Dispatch, Ohio (MCT) — By the time Kimberly Dean was in eighth grade, she had a mortgage, dozens of credit cards and enough debt to fill six pages on a credit report.
The Columbus girl’s financial life was in ruins — but she didn’t know it.
Not until she was a college freshman and denied a JCPenney credit card would Dean learn that someone had stolen her identity when she was 14. That she supposedly owed debts of $150,000. And that this would haunt her for decades.
A terrified Dean could find no one to fix the problem, including the big three credit-reporting agencies, Experian, Equifax and TransUnion.
She was referred to a local judge who signed and stamped an affidavit saying the debts didn’t belong to the teenager. He warned her that she should always carry the piece of paper so that no one would identify her as a deadbeat or criminal.
“It was like living in a foreign country, always having to prove who I was,” said Dean, now 39. “ This started when I was a kid, and it still haunts me today. It’s like the junk drawer in the kitchen or the dirty rug in the garage that no one ever cleans up.”
Identity theft remains a growing threat to all consumers, but children more than ever have become a favorite prey for criminals. Parents are almost powerless to prevent the crime, because there is no way of knowing when an identity is stolen, and the credit-reporting agencies won’t conduct searches using only a Social Security number, mainly because of privacy issues.
For some, it gets worse when they discover the problem.
A Dispatch analysis of nearly 30,000 federal and state consumer complaints showed that two-thirds of people who said they were victims of identity theft also complained that the credit-reporting agencies failed to remove fraudulent accounts, names and/or addresses from their files. Some complained that the credit-reporting agencies would not accept police reports as proof that they had been victimized, the first step toward clearing fraudulent accounts. By comparison, a recent survey by the Federal Trade Commission of 3,000 identity-theft victims showed that a little more than half of the victims said the false information had been corrected or removed.
“The credit agencies and creditors don’t do real investigations. They just don’t do it,” said Leonard Bennett, a Virginia-based consumer-law attorney who has testified to Congress about credit-reporting problems. “Most people complain about identity theft because they can’t get it corrected.”
When a case of child identity theft is detected, parents often have to seek help outside the credit-reporting agencies. One resource has been AllClearID, a California-based company that offers identity-theft protection services and will cleanse a child’s credit history.
Studies done by the company found that the identities of more than 10 percent of the children in its system had been hijacked by someone using Social Security numbers.
The children who are in its database largely are there because their confidential information was compromised when a computer was hacked, stolen or lost. The children’s identities had been used to open more than 17,000 accounts, including credit cards, mortgages, car loans and utility services. Alarmingly, most of the damage had happened long before the data breaches pointed to it, although it’s not certain how.
The study identified a girl in Florida with more than $1.5 million in debt tied to her. A 17-year-old from Arizona had $725,000 in loans and credit. A 14-year-old in Kentucky had a $605,000 California house in foreclosure. The Social Security number of an Ohio teen was tied to a dozen different people who used it to obtain credit and jobs.
“These kids’ Social Security numbers are particularly valuable to thieves because they can go years without detection,” said Bo Holland, chief executive of AllClearID. “Because of privacy restrictions, the credit bureaus can’t share with parents what they find in their (child’s) files. So they don’t know who is using the Social number or what accounts were opened.”
Foster children especially are vulnerable to ID thieves.
Last year, Los Angeles County found that 5 percent of its foster children who were 16 or 17 years old had credit histories.
The Dispatch investigation has prompted Ohio Attorney General Mike DeWine to launch an investigation into whether any of Ohio’s 11,850 foster children have been victimized by identity theft.
Stuart K. Pratt, president and chief executive of the Consumer Data Industry Association, which speaks for Experian, Equifax and TransUnion, said the agencies are working to develop more programs and protections for children.
“It’s a tragedy. There is not a single American that thinks we should shrug our shoulders,” Pratt said. “No one wants any child to be a victim.”
From scary story to reality
The newspaper story he had read about a 17-year-old girl having her identity stolen was keeping David Martin, the father of three, awake one night.
The man from Cuyahoga Falls, near Akron, decided to add his entire family to his paid credit-monitoring service, and he soon learned the newspaper story had become a frightening reality for his 11-year-old son, Tanner.
Someone had been using his son’s identity to pay for bills at a medical center in Florida for more than a year. Tanner suffered from a serious liver disease and was treated at a local hospital, but he had never been to Florida.
Martin soon would discover that his son’s Social Security number and identity had been stolen from three separate entities. He received form letters from a local hospital, a brokerage firm and the state of Ohio, all telling him that a CD containing his son’s information had been lost or stolen.
“You just keep thinking, ‘How can this happen?’ ” said Martin, 49, who works for Goodyear. “You do everything you can to protect your children, and then this happens.”
While parents or family members are occasionally the culprits in child identity theft, there are plenty of other criminals who find ways to access a child’s Social Security number or other personal information.
Children are especially vulnerable when massive databases at schools and hospitals are lost or stolen.
Since 2005, schools and health-care providers experienced more than 40 percent of all data breaches in Ohio, compared with 6 percent nationally. That’s according to data compiled by the Privacy Rights Clearinghouse and analyzed by The Dispatch .
The California-based nonprofit agency combs media reports, government websites and blogs to track breaches of sensitive, personal information. Ohio is one of about 40 states that do not require statewide tracking of data losses.
Nearly 5 million records have been compromised because of data breaches in Ohio since 2005.
And it’s those breaches that leave families such as Martin’s vulnerable to identity theft.
After struggling for more than a year with the credit-reporting agencies and other entities, his son’s financial history was cleared with help from AllClearID in 2010.
Still, the father worries that the theft could somehow come back to haunt Tanner, now 14 and healthy.
“We shred everything that we don’t need now, and we still worry about Tanner’s info,” Martin said. “We don’t know if there is anything else lurking in the system.”
A fear that never ends
The caseworker didn’t directly accuse Dorie McLemore of stealing her 1-year-old daughter’s identity, but the tone of her voice made the mother feel more like a suspect than a victim.
McLemore had been denied government medical insurance for her two children because California state records showed that her daughter Kenna already had an income. Someone had stolen the little girl’s Social Security number.
For the next six months, McLemore and her husband, Bryan, filed complaints with the police and government officials, but no one seemed too concerned that a 1-year-old already had a job.
“The police just kept saying, ‘Well, they didn’t steal anything,’ ” said McLemore, now 36 and the mother of three living in Dallas. “I tried very hard to get to the bottom of it then, but no one seemed to take it seriously or want to do anything to fix it. So I just figured it would work itself out and tried to forget about it.”
Identity thieves often count on their victims to forget about it. Once identity theft is suspected on a credit report, the criminal hopes the grueling, time-consuming process of cleansing a credit history will wear down a consumer.
Adults can at least check their credit reports to guard against more trouble, but children remain vulnerable because they are invisible in the financial system.
McLemore never truly forgot about the identity theft involving Kenna, now 9. It was a chance encounter that likely saved her daughter from financial hardship when she goes off to college.
At a children’s birthday party near their new home in Dallas, McLemore met a woman who worked for AllClearID. After hearing McLemore’s story, the woman checked on Kenna’s history and discovered thieves had racked up more than $34,000 in debt. It remains unknown how her identity was stolen, and no one has been arrested.
AllClearID helped the family deal with the creditors and credit-reporting agencies to straighten out the mess, but the family still isn’t sure the ordeal is truly over.
“It’s a mess of a system,” McLemore said. “You can’t assume it’s ever going to be truly fixed.”
Kimberly Dean looked at the piece of paper the judge had signed — the one she carried for 10 y ears to prove her identity — crumpled it, and threw it away.
In her mind, she had done everything in her power to clean up the financial mess some crook created for her when she was 14. She had spent hundreds of hours pleading with the credit-reporting agencies and creditors to correct her credit history.
She applied for and was granted a new Social Security number and assumed that creating a new identity would solve the problem.
But creditors kept calling and accusing her of owing them thousands for furniture, clothing and food bought by the thief.
“Back in the early 1990s, no one really understood ID theft that well,” said Dean, a single mother of four who lives on Columbus’ East Side. “I didn’t think to go to the police, because I thought the credit agencies were the police of this system. I couldn’t afford a lawyer. Eventually, I just gave up.”
Some identity-theft victims never truly receive the help they need. Some try to fight through the mess alone and don’t succeed. Some don’t know who to call or where to file a complaint. Some are intimidated by the system. Others assume it will just go away.
Dean still doesn’t know how she became a victim or whether her credit problems will ever disappear.
She did learn in 2009, more than 17 years after she first realized that her identity had been stolen, that her old Social Security number was still being associated with her name.
That explained why the credit reports she received looked accurate, but those seen by creditors still were filled with the crook’s debt.
“I don’t even request my credit reports anymore,” Dean said. “You just get tired, you know? You just get tired.”
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