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What Is Financial Child Abuse?

Tamara Wilhite is a technical writer, industrial engineer, mother of two, and published sci-fi and horror author.

If someone steals a child's Social Security number to open lines of credit, the child won't know for years. That is one of the attractions of financial child abuse.

If someone steals a child's Social Security number to open lines of credit, the child won't know for years. That is one of the attractions of financial child abuse.

What Is Financial Child Abuse?

The simplest definition of financial child abuse is when a child is a victim of identity fraud combined with financial fraud. Financial child abuse occurs when someone intentionally commits identity theft using a child’s Social Security number and then compounds the crime by using the child’s identity to benefit themselves financially.

The identity thief may use a child's clean credit report to take out loans, work despite a criminal record, work in a country illegally, or try to get utilities.

Financial child abuse is increasingly common due to the fact that it is very difficult to run a credit report against a child's Social Security number, even as a parent.

How Do You Know If Someone Is Using Your Child's Identity?

  • If your child has a credit report at all, this may be a sign of financial child abuse.
  • If you cannot open a credit card for your teenager because of a credit check, this is a likely sign of financial identity theft.
  • If you cannot open a bank account or credit card for your child because one already exists with the institution associated with your child’s Social Security number, demand the details of the account to determine if this is the result of identity theft or a relative setting up an account in the child’s name.
  • If you receive credit card solicitations addressed to your underage child, this is a possible sign of financial child abuse or identity theft.
  • If you cannot claim your child as a dependent on your tax return because the IRS says the child makes too much money, this is a sign that someone else is working with the child's SSN.
  • If your child applies for his or her first job and is denied due to poor credit, this is a sign of financial child abuse or identity theft.
  • If your 18-year-old son or daughter is denied a security clearance upon joining the military due to bad credit history, this is a likely sign of identity theft and financial child abuse.

Using a Child's Social Security Number for Profit

Parents have used their children’s Social Security numbers in an effort to get around their own bad credit. If you have declared bankruptcy or have trashed your credit after going through a divorce, you may not be able to get the utilities turned on without a massive deposit or get an apartment without putting down several months’ worth of rent.

By using a child’s Social Security number, the parent gains access to a clean if blank credit report. While this blank credit history is worth less than a good credit history, it is better than a bad credit history. With a blank credit report, a parent can get a cell phone with a modest deposit, an apartment with two months’ worth of rent and a new car with a 5-10% interest rate instead of an exorbitant one. Financial child abuse seems to be the easy way out of a bad credit history, but it is illegal.

Financial Child Abuse and Illegal Immigration

American-born children of illegal immigrants are at particular risk of financial child abuse. While the parent is in the country illegally, the child is an American citizen, has a clean credit report tied to his or her Social Security number and no criminal record. A parent in the country illegally may start by using the child’s Social Security number to gain employment.

The Social Security number of the child is then used to get a driver’s license and set up utility bills and bank accounts. The parent then builds a whole financial life on the child’s Social Security, including credit cards, home loans and car notes. If parents are able to work and provide a better life based on the child’s financial identity, they rationalize the theft, ignoring the fraud they perpetrate on their own family members.

Financial child abuse is also driven by the need to collect welfare benefits in a country that limits welfare benefits for illegal aliens. Since illegal aliens have a lower education attainment than the native population (with half lacking a high school diploma), those who are working earn far less than natives. Due to their illegal status, they often end up working for less than minimum wage out of the need to support their families, increasing the need for social services to make up the gap. Illegal immigrants may file for benefits under a child’s Social Security number such as welfare or simply collect unemployment after working under a child’s identity, increasing the demand on the social safety net. This problem is separate from the practice of illegal aliens filing for the Earned Income Tax Credit for American-born children and children living in Mexico.

Who Does This?

Family members are not the only ones who steal children’s identities. Identity thieves target children’s identities for fraud as well. Children don’t know about the identity theft until they start seeking employment or try to sign up for credit cards.

Adults can check their own credit reports, but children cannot do this for themselves, and parents rarely check the credit reports of their children. Identity thieves target the identities of children so that they can sell the personally identifiable information to criminals who will use it to rack up debt or get a “fresh” financial start; regardless of the impact on a victim, they know will not know about it for years.

The Impact of the Crime

Financial child abuse causes problems the moment the child becomes a legal adult, if not sooner. For every news report about American-born children of illegal aliens discovering that they cannot get student loans because a parent filed for bankruptcy under their name or cannot work because their parent is already working under their Social Security number, dozens more cases are unreported. However, financial child abuse is not limited to illegal aliens.

Parents have used their own children’s Social Security numbers to get credit cards and run up debts when their own credit was trashed. Young adults have tried to file for Social Security Disability only to be refused because someone was working under their Social Security number. Children have been denied Medicaid because an adult is working under the child’s Social Security number.

Financial child abuse can make it difficult for a young adult to get a job that requires a credit history check since the fraud under his or her name gives them a bad credit history. Financial child abuse can cause problems with the IRS for the identity thief’s back taxes and debt collectors who find the original holder of the Social Security number. Financial child abuse will cause strife between generations if it occurs within the family.

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  • Identity Theft: 'Kids Don't Know They're Victims' : NPR
    It wasn't until she applied for Medicaid that Jennifer Andrushko discovered someone had been using her young son's Social Security number. Because kids don't have much use for credit, the crime often goes undiscovered for years. Now, Utah is piloting

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

Questions & Answers

Question: If a parent has her name on a bank account listed as a guardian because the child is a minor, and the parent proceeds to take all of the money out (and spends it on drugs), is that considered child abuse?

Answer: In general, yes. If the money is held for the child's benefit like an inheritance or child support, then this misuse of funds may be a crime. Talk to an attorney.

Question: How can I find information on my own bankruptcy my parents forced me into after stealing my identity?

Answer: My first suggestion is checking the credit report in your own Social Security Number. Anyone who uses your SSN in a bankruptcy will leave one in your credit history. The next step is doing a search of filings with the federal bankruptcy courts by Social Security Number. This is like searching court case logs for any court case involving a set person. This can go back much further than your credit report.

Question: Since 1963, my identity has been stolen. In 1999, my husband was drugged by our insurance company. How can any of this be resolved?

Answer: You need to talk to an attorney who specializes in identity theft cases to get your personal records corrected, since someone else working under your identity could take your Social Security benefits. I don't understand what happened with your husband. Discuss that matter with a personal injury attorney if he had brain damage or died.


Exstepper on August 24, 2019:

This happened to me. But I was lied to about how and why. It was in the 90s before I had a computer or any understanding of credit checks. Since I was told Well you co-signed didn’t you? I thought that meant I was given a credit card authorized by her. She forced me into bankruptcy saying we were both going bankrupt. I had no way of knowing that only I was being forced into bankruptcy. How and where can I find information on my bankruptcy from 1992?? She kept all the records from me. I’m lost and now she’s asking my daughter to open a checking account with her. No doubt for some nefarious reasons. I just want to prove what actually happened and Pacer requires a file/case number for which I don’t have. Where on earth can I find information on my own bankruptcy while I was still in college and had absolutely no credit cards in my name that I knew of?

stella vadakin from 3460NW 50 St Bell, Fl32619 on September 12, 2015:

Hi tamarawilite, wow I never realized this could happen. My granddaughter stayed in the hospital for 4 months when she was born and had her identity stolen. I never knew this could happen. Great informative hub. Stella

Alex Standt on May 02, 2013:

This is a great article and you can put financial before the child abuse all day long! To me it is clearly CHILD ABUSE.....period! Nevertheless, I love this article, it really brings forth a great awareness. My advice to any concerned parent would be never use your your child's identity under any circumstance, employ prevention methods so nobody else can use their identity and early detection. The chances of any real damage happening becomes much less if the crime is detected early. Here is some other good info:

Tamara Wilhite (author) from Fort Worth, Texas on September 10, 2012:

The worst part of financial child abuse is that it is often done by parents to their own children. I read about one young man who couldn't get a college loan because his mother had given out his Social Security Number to an illegal alien boy friend, who then used it to work and get credit and file bankruptcy. And he'd passed it on to others. The mother tried to help someone in a misguided way and ruined her son's life, causing him to fight identity theft and clean up a credit record before he could get money to go to school or straighten out a credit history employers would check.

Life Under Construction from Neverland on September 09, 2012:

I hope people would think first before doing this kind of thing. They are destroying someone else's life. Great hub, well written!

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