The Question of Legislation

The State of Maryland has passed and sent to the Governor an interesting piece of legislation.  It will allow parents to freeze their children’s credit report. It will allow parents to freeze something that is not supposed to exist.  So if there is no file what does the parent do?  Keep checking back every year until they find that the file has been created?  The effort and desire to do something good for children has produced something that will be marginally effective at best. 

The correct way to protect the children would be to have the Social Security Administration supply the name and SSNs for all the children to the three credit reporting agencies.  This file would be automatically checked anytime a request for credit report was made of the CRAs. If no file is found the CRA could then check the list of minors.  It would protect all of the minors without the parents having to do anything special.

There is one clear problem with a sign up system. For some of the children the person who should be signing them up will be the person stealing the child’s identity. The children who need the protection most are under the control of the perpetrator.

When we first started looking into the issue of child identity theft the first group we ran into were foster children who were aging out of the foster care system.  Soon after, we discovered that children who were in close proximity to drug users often found themselves to be victims.

Our original suggestion was that the SSA would share the list of minors with the three CRAs and the Department of Motor vehicles for all the States and Territories.  We suggested that because we had discovered that some of the stolen identities were used to get replacement drivers licenses. One of the cases involved a father who had lost his driver’s license due to multiple DUI.

I applaud the desire to help children avoid becoming victims of identity theft. From what I have seen there is a need.  It is however a need that must be fixed the right way.  There are too many mistakes that can come from rushing a fix into place.