They’re Your Kids, but Their Identities are Their Own

Posted on August 17th, 2009 by Alicia Diefenbach |

I’m extraordinarily lucky to have a career that I love and it’s all about who I work for. As a former financial services regulator, I continue to work with government to help identify the financial education needs of Washington State citizens. I then create resources that serve those needs.

I also administer a project on behalf of credit unions (Verity is one of those credit unions). It’s called Credit University. In its fifth year, we’ve reached about 20,000 teens. It’s a fun classroom presentation that teaches kids about identity theft, credit, and savings.

I mention this program not as an opportunity for shameless self-promotion, but because of how the financial worries of teens have changed since the recession hit. As it pertains to identity theft, it’s not good news.

We visit 40 schools each year with Credit University. During the first four years of this program, I’d usually meet two or three teens annually that had been victims of identity theft. The stories often involved being careless with personal information online or at school.

In 2009, the majority of these schools had multiple teens in the audience who spoke to me after the presentation to ask me one question: Had their identities been stolen or just borrowed. Borrowed? At first I was confused. You can’t ‘borrow’ an identity. Using anyone else’s personal information to obtain goods or cash or credit is identity theft, and it’s a felony in Washington State. The kids were using the word ‘borrowed’ because in most cases the identity thief was a loving, trusted parent or relative living inside the family home.

This is a touchy subject. Families are working hard to keep it together right now. Between struggles to make the mortgage and keep up with the car payments, lots of people are falling behind on their bills. Students are reporting utility and credit card bills showing up in their names after their parents’ accounts are closed. Often this happens because parents don’t want the lifestyle they’ve provided for their child to wane. Sadly, the cost of maintaining this lifestyle extends far beyond the billing cycle.

The current credit crunch makes every single point on a credit score count. Today’s students are competing for smaller pools of student loan money. Those funds will be going to the most qualified applicants, a key qualifier being an unblemished credit report. Unpaid family bills that linger slowly chip away at a credit score. A child’s ability to attain that student loan, establish a residence, or even compete for that first job requires a solid credit history.

Even worse, the path to improving their credit score requires reporting the identity thief to the authorities. This is a devastating experience for the entire family, but teens are asking about the process.

Families in this situation can take positive steps to turn things around before it’s too late. Quickly paying off bills in the child’s name and canceling those accounts will minimize the damage. Even if the balance is high, keep the minimum payments current. If the debt is a line of credit, charge nothing further and start chipping away at the balance. If you’re dealing with utilities, find out if another adult in the household can transfer the service to their name, and inquire about programs designed to assist families during tough times.

For additional information about Washington State’s Identity Theft laws, go here.

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