What is 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.
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. | Source

The simplest definition of financial child abuse is identity fraud combined with financial fraud. Financial child abuse occurs when someone intentionally commits identity theft using a child’s Social Security Number, then compounds the crime by using the child’s identity to benefit their own finances.

The identity thief may use the clean credit report of a child to take out loans, work despite a criminal record, work though they are in the country illegally, or try to get utilities turned on until their own credit report has healed.

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

Identity thieves love the identities of children, because the ID theft won't be noticed by most for years.
Identity thieves love the identities of children, because the ID theft won't be noticed by most for years. | Source

Taking the Easy - and - Illegal Way Out of Bad Credit

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.

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, 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.

Identity Thieves

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 to a victim they know will not know about it for years.

The Impact of Financial Child Abuse

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 Number 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.

Signs of Financial Child Abuse

If your child has a credit report at all, this is 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 under-age 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 under his or her 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 a bad credit history, this is a likely sign of identity theft and financial child abuse.

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Comments 4 comments

ladyguitarpicker profile image

ladyguitarpicker 13 months ago from 3460NW 50 St Bell, Fl32619

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 profile image

Alex Standt 3 years ago

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:

tamarawilhite profile image

tamarawilhite 4 years ago from Fort Worth, Texas Author

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.

unknown spy profile image

unknown spy 4 years ago from Neverland - where children never grow up.

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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