Children’s digital identities are easier to defraud, harder to fix

Almost a million children in the U.S. were victims of identity fraud in the year ending October 2022, finds research by Javelin Strategy and Research. Many more were exposed to data breaches, though such attacks can go unnoticed for years until a child starts to engage in more grown-up aspects of life and finds he or she already has bad credit.

One in 43 children in the U.S. are exposed to data breaches, up from one in 45 in the year to October 2021. One in 80 or 915,000 were victims of identity fraud. The overall cost of the frauds has fallen from close to US$1 billion in the year October 2021 to $668 million this year, but the average cost of a fraud for a household is $1,128. This is made up of $752 for the fraud itself and a further $376 of out-of-pocket expenses to resolve the fraud. The examples given were all of digital identity fraud.

A striking difference for identity fraud when it affects children is that it takes far longer to resolve. For fraud affect adults this generally takes around nine hours, when a child is the victim, this increases to 16 hours.

In a succinct and informative webinar led by Tracy Kitten, director, Fraud & Security at Javelin Strategy and Research to discuss the findings, guests including a parent of a child whose identity had been stolen talked about why it happens and why it take so much longer to try to fix.

The mother recounts how her daughter had to deal with the Internal Revenue System where it became apparent that her child’s identity had been stolen. Unlike for adults, the credit of a child cannot be frozen online. Instead, parents have to go in person.

As Kitten summarizes, identity fraud affecting children is hard to detect, children are easier to target and they are often using more social media platforms, the riskiest place for child digital identity fraud. Children under seven are most likely to be victimized.

Ninety-one percent of households have children on social media, where YouTube is the most common at 81 percent and TikTok the next most common at 53 percent. When a criminal take-over happens for a child in an ID fraud, accounts are appropriated at the following rates: 57 percent for social media accounts such as Instagram, TikTok; 54 percent for email; 52 percent for mobile phone accounts and 40 percent for physical devices such as mobile phones.

Parents not aware of the risks involved of putting a screen in a child’s hands, argues Ben Halpert, founder of Savvy Cyber Kids: “There are true negative implications for children every time you put them in front of a screen and it’s actually more dire every time we put them in front of a screen the younger they are.”

He acknowledges that it is not simply a case of parents handing over a device, as children will still manage to access social media, especially if devices are not equipped with tools for controlling children’s internet use.

“The minute that you believe your child can have a screen in front of their face is the minute you should be starting the conversation on appropriate behaviors online,” adds Halpert.

He believes that social media is such a target for ID fraud as it brings connections to a victim’s network of contacts or friends, allowing the fraud to spread.

Kitten points out that the survey found that 70 percent of parents worry about cyberbullying, scams, predatory advertising and predatory engagement. Yet 70 percent also disregard the need for social media monitoring.

While work is underway around the world – whether regulation, product design or technology for age verification – to protect children from online harms, this tends to aim to keep them away from harmful content or predatory contact, rather than protecting their identities.

“They don’t have to go to malls anymore, they don’t have to creep around,” says Dave McCain, special agent at the United States Secret Service, referring to criminals targeting children, “they don’t have to try to get access. It’s easy for them – we’ve allowed it to be easy.”

More households are filing police reports. From 28 percent last year to 45 percent this year. Convictions are increasing and the time spent resolving has dropped by four hours to the 16-hour mark.

The panel discussed responses such as talking to children about privacy and online behavior in tandem with controls on access and monitoring. They also call on credit providers to simplify the steps to freezing children’s credit as part of remedying identity fraud.

Article Topics

children  |  cybersecurity  |  data protection  |  digital identity  |  fraud prevention  |  social media