One in every 50 children in the US becomes a victim of identity theft

Approximately 1.25 million children in the US fell victim to identity theft between July 2021 and July 2022, which makes it every one in 50, LSEG Risk Intelligence said in its report.

According to the report, this led to $1 billion in total losses — and these incidents surged by 40% between 2021 and 2024.

In cases of child identity theft, cybercriminals use a minor’s personal information to access credit and loans or apply for government benefits. Often, all they need are some simple details, like name, date of birth, and social security number or national personal identification number.

It’s an especially attractive attack vector for threat actors because it can go unnoticed for years, before the child reaches adolescence and decides to open a bank account or apply for a student loan.

Parents as the unwitting accomplices

Additionally, parents themselves often unknowingly become accomplices in the crime by sharing children’s birthday details, names, and addresses in social media posts or images. According to research by Barclays, by 2030, information shared by parents online will lead to two-thirds of the identity theft committed against young people.

A separate report from the Children’s Commissioner of England worryingly suggests that parents share an average of 71 photos and 29 videos of their child per year, which amounts to nearly 70,000 pieces of content by the time their child reaches the age of 18.

Researchers outline the case of Renata Galvão, who was only six years old when crooks used her identity to amass a debt portfolio of over $400,000. Despite her obviously young age, threat actors managed to use her identity to secure loans and access credit.

“When I turned 18, was working, opened a bank account and bought a car, everything that happened during my childhood came crashing down on me all of a sudden. I now had a financial life, and those things could be taken away from me. They froze my assets and took my savings to pay off the debts,” she says, according to LSEG Risk Intelligence.

Police at the door

Similarly, Axton Betz-Hamilton discovered that her identity had been stolen when she received her first credit report, showing her credit score in the lowest 2%. Her records had been used to drain bank accounts, write bad checks, and take out credits — all before the police turned up in front of her door one evening to arrest her.

“Debt collectors called me constantly and sent letters for debts that weren't mine. I changed my phone number, but still they came. I couldn't buy a car or get a nice apartment. When I contacted a creditor to say I was an identity theft victim, they called me a liar,” she explains.

In many cases, the perpetrator is known to the victim — as in this instance, where it was Betz-Hamilton’s mother, which was only discovered after her passing. This often backs people into a corner of either pressing charges against close people or dealing with the aftermath of the theft.

As a result of identity theft, more than half of the victims are denied credit, a quarter struggle with negative consequences 10 years later, and a small percentage have a lifelong criminal record for offences they did not commit.

This is enabled by the fact that the crime can go unnoticed for many years, with an average age of an identity theft victim being eight years old, according to the researchers.

Financial institutions are well-positioned to prevent cases of child identity theft. They should integrate robust identity and age verification processes, enable multi-factor authentication for any customer with no credit history, and utilize biometric identification, as well as set up parental controls.