Identity thieves increasingly target children

A recent investigation into illegal immigrants who were hired by a Texas nursing home after they bought Social Security cards revealed that seven of the identification numbers on the fake cards belonged to children, a Social Security Administration special agent said Thursday. Increasingly, identity thieves are hacking computers at schools and pediatric centers to retrieve this lucrative personal information, experts say.

"While this investigation involved a very small sample, we found that of 28 misused SSNs identified, 25 percent belonged to children," Antonio Puente, special agent for the SSA Office of Inspector General's Dallas field division, testified at an off-site congressional hearing. The House Ways and Means Subcommittee on Social Security held the session in Plano, Texas, to examine the growing problem of child identity theft.

More than 140,000 American children each year become victims of identity theft, experts said at a July child-centric fraud forum sponsored by the Federal Trade Commission. That number includes kids whose relatives, when in a financial bind, applied for new credit with their young family member's name and Social Security number. Reports of child identity theft increased nearly 200 percent between 2003 and 2009, when 19,000 cases were filed, according to FTC figures.

Robert Feldt, special agent in-charge at the same Texas division, said child identity theft "allows for the potential long-term undetected abuse of a genuine SSN -- and the potential long-term harm to a young person's financial future." It usually isn't until about 18 years later that the adult victim discovers a mysterious history of unpaid bills or loan defaults.

All the suspects questioned during the nursing home incident were Mexican nationals who currently are undergoing deportation and removal proceedings, Puente said.

In one new form of identity fraud, corrupt vendors use dormant Social Security numbers, particularly those assigned to children, to establish bogus credit files for people with bad credit, Feldt said. They advertise these offerings, called credit profile numbers or credit protection numbers, on websites at prices between $40 and $3,500.

"Despite what many of these credit repair websites imply, consumers should know that CPNs are not legal," he testified.

The inspector general's office is pushing for legislation that would limit the ability of local governments and companies to access and display Social Security Numbers. Schools and social services agencies often widely circulate sensitive personal data for kids in foster care, leaving foster children especially vulnerable to identity theft, panelists at the July summit said.