Consumer Protection: Current Scams And Wisconsin’s Child Credit Protection Act

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• New Tool Available To Protect Children’s Personal Data

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  Identity theft is the most often associated with adults and credit cards, but it can happen to children’s identities as well. A new Wisconsin law though aims to help protect children’s personal data and credit.

  Sandy Chalmers, the administrator of Wisconsin’s Division of Trade and Consumer Protection, said that adults have been aware for a while that their personal data needs to be protected to prevent fraud and identity, “but children are victimized by identity thieves as well.”

  Why would such thieves use a child’s personal data? Chalmers explained that “a child’s Social Security number is very attractive to thieves, because there is no previous credit history associated with it.

  “That clean Social Security number is easily paired with any name and birth date,” she said. “Once that happens, a thief can use it to set up all kinds of credit card accounts, to take out loans, or get a job.”

  Because children might not use their Social Security number until they get their first job in their late teens, the fraudulent use of their personal data could go undetected for many years. As Wisconsin’s Bureau of Consumer Protection wrote, “The damage to the child’s credit could be expensive and time-consuming to repair and could hinder the child’s ability to secure student loans, purchase a vehicle or apply for a job.”

  Previously, even if parents were aware of the risks, it was hard to know what to do to prevent it. In the past, Chalmers said the best advice that they could offer concerned parents was to see if there was a credit report in the child’s name and Social Security number. That, though, was really only useful to see if fraud had already been committed.

  Happily, there is now a tool that parents can use proactively, “to lock away their child’s credit,” Chalmers said. This protection is available through Wisconsin’s recently passed Child Credit Protection Act.

  According to Wisconsin’s Bureau of Consumer Protection, to take advantage of the new protections, Wisconsin consumers should contact each of the three major credit reporting bureaus (Equifax, Experian, and Trans Union) and request that each provide a report for the child and then freeze it. To freeze an account means that no one can access the file in order to extend credit based on it. This protective measure locks the child’s credit record until the age of 16.

  There is a $10 fee to the credit bureau for the service, and the person requesting it will need to submit documentation of their identity and their relationship to the child. Each credit reporting bureau might have different requirements for verifying the relationship, but it might include a birth certificate, a power of attorney form, or similar proof of authority to act on their behalf.

  It’s a big advance, Chalmers said.

  “Wisconsin is one of very, very few states that have taken this action so I would say that we’re at the forefront on this issue,” she said. “It’s great news.”

  In addition, the new law also allows a court-appointed guardian or conservator of a vulnerable adult to freeze a credit record for the individual. The process would be similar to that for a child.