U.S. Senator Gary Peters (D-MI) and a bipartisan group of senators introduced legislation to help protect children’s identities from “synthetic ID fraud,” a form of identity theft that relies on pairing stolen Social Security Numbers (SSN) with fake names and birth dates.
A recent study found that one in every ten children had their SSN used by identity thieves to fraudulently open bank accounts or credit card accounts, negatively affecting a child’s credit before they even become adults. U.S. Senators Tim Scott (R-SC), Claire McCaskill (D-MO) and Bill Cassidy (R-LA) joined Peters in introducing the bill.
“Lenders can and should do more to protect Michigan children from identity thieves who ruin their good names and credit by taking out fraudulent loans,” said Senator Peters. “This commonsense, bipartisan bill will give lenders the tools they need to verify identities, stop billions of dollars in losses from fraud, and put Michigan children on the path to a secure financial future.”
“It is simply inconceivable that a criminal would seek to exploit a child’s identity and personal information for their own financial gain, and we must look to utilize all of our resources to stop these crimes from continuing to negatively impact our families,” said Senator Scott. “This upgrade to Social Security Administration procedure is a commonsense and effective way to cut down on synthetic ID fraud and help prevent millions of people from having their identity stolen.”
“Scammers have left no stone unturned in stealing children’s Social Security numbers to open fraudulent credit cards—wrecking kids’ credit scores before they’ve even graduated high school,” said Senator McCaskill. “When it comes to protecting Missourians’ hard-earned savings, and their identities, we need every tool available to stop this theft. This legislation would do just that—by bringing the Social Security Administration into the modern era with better verification steps to protect consumers.”
“Some children have their identities stolen before they can even talk,” said Senator Cassidy. “This bill protects them and modernizes fraud detection to stop more people from becoming victims.”
The Protecting Children From Identity Theft Act will help prevent children’s identity theft by requiring the Social Security Administration (SSA) to accept electronic signatures from consumers so financial institutions can verify customer ID and root out synthetic ID fraud.
According to a recent study, children’s identities were stolen at a rate of about 50 times more frequently than adults. Data showed that the information was utilized by identity thieves to apply for loans, utility accounts, property accounts, driver’s licenses, and vehicle registration.
The long-term consequences can leave children and families burdened with unintended debt, and a flawed credit history.
Overall, the problem with synthetic ID theft has become more prevalent and costlier over the past few years. A recent study predicted that financial losses attributed to synthetic ID theft have doubled since 2014, and losses have been estimated at nearly $6 billion.
Last month, Peters, Scott, McCaskill and Cassidy sent a letter to SSA’s Acting Commissioner urging the agency accept individuals’ consent electronically in order to help financial institutions better prevent identity theft and fraud.