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ID Fraudsters Tapping Children's Social Security Numbers, Report Says

New scam often goes undetected until minors' credit ratings are wrecked, report says

A new wave of identity fraud could cause problems for young children who won't find out about it until years later, a report said yesterday

According to an Associated Press news report, hundreds of online businesses are using computers to find dormant Social Security numbers -- usually those assigned to children who don't use them -- and then selling those numbers under another name to help people establish phony credit and run up huge debts they will never pay off.

The scheme works like this, according to AP: Online companies use computers and publicly available information to find random Social Security numbers. The numbers are run through public databases to determine whether anyone is using them to obtain credit. If not, they are offered for sale for a few hundred to several thousand dollars.

Because the numbers often come from young children who have no money of their own, they carry no spending history and offer a chance to open a new, unblemished line of credit. People who buy the numbers can then quickly build their credit rating in a process called "piggybacking," which involves linking to someone else's credit file.

Many of the business selling the numbers promise to raise customers' credit scores to 700 or 800 within six months.

If they default on their payments and the credit is withdrawn, then the same people can simply buy another number and start the process again, causing a steep spiral of debt that could conceivably go on for years before creditors discover the fraud.

Authorities say the scheme could pose a new threat to the nation's credit system. Because the numbers exist in a legal gray area, federal investigators have not figured out a way to prosecute the people involved.

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Tim Wilson is Editor in Chief and co-founder of Dark Reading.com, UBM Tech's online community for information security professionals. He is responsible for managing the site, assigning and editing content, and writing breaking news stories. Wilson has been recognized as one ... View Full Bio

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