The hack on VTech Holdings, Inc. in November and various Sanrio websites in December are proving that kids are just as vulnerable to identity theft as working adults; however, what some parents don't realize is that theft of their children's identity may just be more valuable for hackers and more detrimental for the future of their own kids.
As proven during the VTech and Sanrio hack, the people behind the data breaches seem to see the potential of a "clean slate" that minors have and, the younger the kids are, the longer identity thieves will have something to milk. It's frightening really, especially for the kids who would grow up to discover that they have already stacked up a huge amount of debt way before they even had financial independence.
What makes children's identity so attractive?
Kids are practically a blank slate. They don't have historical data in terms of medical, financial and legal records. Since parents take care of pretty much everything as the child grows up, which means there is no reason for the kids to have a credit history until they are adults, parents have a usually more relaxed attitude and rarely think to check if something is amiss.
Now combine that with the new technology that many kids are intent on owning: smartphones, tablets and learning devices with online accessibility. Software and apps connected to such devices, more often than not, require you and your kids to provide information in their online databases which anyone with a malicious intent and enough skill can compromise. Take note that not all companies are able to provide the necessary security and encryption.
If an adult looking into getting a "free ride" for a few days, months or, worse, years, is able to obtain that clean slate and claim it as theirs, they can start using your child's information to mask their own identities. They wouldn't have much of a problem with getting caught too soon unless the parent decides to check up on their child's record and discovers the anomalous activity.
The affected child could wake up many years later as an adult prepared to lead a responsible life only to find out they already have a bad credit score and incurred a huge debt.
Who is ultimately responsible?
The current situation should remind parents that kids are very vulnerable to identity theft and that, while companies should have more security protocols to prevent data breaches, the role of both parents and children must be taken into play to increase the security of the children.
Companies need to step up with providing tighter security against data breaches. In such a case like VTech's hack, the company was too relaxed when it came to securing what is supposed to be private information and data encryption was not even applied. Especially when it comes to companies offering learning devices with online access, just because the main clients are children does not mean that security can be a little more relaxed since, unlike adults, they can't quickly take legal action.
Companies should keep in mind that any personal information is already a gold mine to anyone with malicious intent and children must be protected from them. It's not only adults who earn money that are targeted and not just retired people either. Even children's information can be used for misdeeds and companies are partly responsible when these things happen, especially if the information was leaked from its own database.
Parents and other adults also hold just as much responsibility as companies. As the adult and another potential victim of identity theft, you should know how much damage an identity theft poses so parents should neither be too relaxed to not keep an eye on your children's credit score nor afraid to step forward and request credit monitoring companies for credit reports on behalf of your children. So what if nothing comes up and you looked like a paranoid parent? In the end, you can rest easy knowing that you took action and your child's financial future is still secure.
A child's innocence can also be taken advantage of and by "innocence" we mean the way a child is not yet well-informed about the possible dangers of providing information over the internet. Children would be honest and provide complete information and parents would think kids may not be able to wrap their head around "complex" concepts but this is not necessarily the case nor the solution.
Prevention is, however, simpler than most parents perceive. Since children have access to the internet, they should also be proactive when it comes to protecting their own identities. Hence, children should be taught to check in with a parent or guardian first before providing any personal information online. If the children themselves know how to "think before you click," then it creates a healthier mindset for them when it comes to dealing with online matters, not just identity theft.
The government and some companies can offer support
The New York State has given parents the right to freeze their minor child's credit reports. This is done through companies like Equifax, Experian and TransUnion. The good news is that New York isn't alone on this. Arizona, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, Montana, Nebraska, New York, Oregon, South Carolina, Texas, Utah, Virginia and Wisconsin also require the three companies to help parents create credit reports for their children and quickly freeze it in the event that fraud is detected.
Still, prevention is better than cure
Just like the old saying goes, prevention is better than cure. The best thing to really prevent identity theft from happening is to make sure that both parents and children are not sloppy with their information. That is, everyone should be more careful about their online behavior and what kind of information they provide through the internet. Warn a child of the possible dangers posting their identification cards can pose. It may be fun in the beginning but it won't be fun when you find out you and your child are already victims, especially when you had a chance to prevent it from happening.