Courtesy of Ora DeMorrow

Jayne’s son was born in a small hospital in the suburbs of Denver. Like every newborn, he had a pristine credit record. Life is easy with no money to handle, no car to drive, no taxes to pay. Then, his 16th birthday comes around, and the young teen sets out to get his first part-time job at the local Target. Imagine his family’s shock when he fills out the employment application and is told that, according to his Social Security number, he’s already worked at Target—several times!

Apparently, the boy’s Social Security number was stolen right from the hospital when he was born.

Cases like these have become commonplace. One five-year-old was discovered to have a 17-page credit history. Parents are finding that their children have mortgages, auto loans, and even criminal records.

In a world where a Social Security number is all that identity thieves need to create new wealth, children are prime targets. The Federal Trade Commission (FTC) recently published a report revealing that over 400,000 children are becoming victims of identity theft each year. American teenagers 18 or younger have doubled the number of identity theft victims in the past three years. That means that over 50,000 children become victims of identity theft each year without their parents having any idea.

Since children don't generally have any credit history and won't attempt to use their own credit for many years, thieves can usually get away with identity crimes against children for longer periods. Then, when a child turns 17 or 18 and applies for a school or auto loan, the crime is discovered and the teen is denied credit because of a negative history.

Identity thieves want the children's information to get credit; they do not care about paying the bills or that the credit bureaus will lower the victim's credit score and damage his or her credit history. In the long run, their activities have the companies calling the parents to collect debt that does not belong to their children.

The identity theft problem becomes even worse when the targeted victim is an infant. The FTC has received accounts from parents reporting victims as young as 11 months old whose identities were stolen and used to make fraudulent purchases. The bills ended up in their parents' hands. The fact that these illegal activities are not noticeable for years is alarming.

Often children’s Social Security information is sold for use by illegal immigrants or individuals attempting to restart their lives and avoid arrest. According to an article published by Bankrate.com, Steve Frasher, a police spokesman for Riverside, California, calls the thieves "phantoms." He says most don't use their real names, their addresses are fictitious or to abandoned residences, and they often order products by phone or online.

Contrary to popular understanding, credit agencies don't begin a credit history on an individual until the individual's identifying information is used to open a credit account. This information may include name, age, address, and Social Security number. Thieves count on this and the fact that neither children nor their parents check to see whether credit reports already exist. This gives a thief ample time to create a new life using a victim's information. Armed with the necessary data, the thief can fraudulently open bank, credit card, and utility accounts; falsely obtain a job; and file tax returns.

To minimize risk, follow these five basic guidelines:

• Be selective about sharing a child’s Social Security number. The fewer places that information is recorded, the safer the child is.

• Don’t be too trusting with friends and relatives. People in one’s personal circle commit a large percentage of identity theft.

• Warn children of the dangers of giving out personal information—particularly online.

• Teach children to protect their personal information like they would cash.

• Check your child’s credit record annually, when you check your own.

If six-year-olds with mortgages and nine-year-olds with auto loans aren't enough to concern you, identity thieves have also been known to use children's Social Security numbers to claim other people's children on their taxes (to gain a deduction) and to check into hospitals to undergo expensive procedures with no intention of paying their own medical bills. If your children are young, you might think they aren't at risk, but anyone with a Social Security number is vulnerable.