Parents don't only have to be vigilant about protecting their own identities anymore; now they have to worry about protecting their children's as well.

According to the Associated Press, children's Social Security numbers (SSNs) are the newest hot commodity [1]in the identity theft marketplace, providing buyers with years of possibly uninterrupted use. "Hundreds of online businesses are using computers to find dormant Social Security numbers—usually those assigned to children who don't use them—then selling those numbers under another name to help people establish phony credit and run up huge debts they will never pay off."

The scam works like this: perpetrators use computers and publicly available information to identify unused SSNs, likely from children or convicts. After making sure the number is clean—meaning it's active and isn't on file with any of the credit bureaus— the company sells the number to a buyer for anywhere between a few hundred to a few 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," reports the Associated Press's Bill Draper. "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."

The people selling the numbers use deceptive terminology to avoid drawing law enforcement attention, reports Draper. Rather than advertise the sale of SSN, they simply call them CPNs, which can stand for credit profile, credit protection or credit privacy numbers. When applying for credit, the companies tell CPN buyers to use their real name and a never-before-used address.

Depending on the child's age, the SSN could give the number's purchaser years and years of using the number undetected or simply run up debts and walk away from them.

(For more on how SSNs make identity theft easier, see "Social Security Numbering System Leaves Public Vulnerable [2]" and "Congress May Have Inadvertently Made Identity Theft Easier, Researcher Says [3].")

Sometimes, however, the culprit isn't a professional criminal looking to make a quick buck.

"[M]any times, parents, aunts and uncles, or even grandparents who are strapped for cash will apply for a credit card or loan in the child’s name with the full intention of paying it back. However, once the money is gone, it’s gone, and the child ends up as the one held accountable," writes Dr. Eva Norlyk Smith [4] at Credit Card Guide [5]."Because credit card companies, loan agencies, and other lenders don’t check for age, relatives with access to a child’s social security number can easily apply for loans and credit cards and even create gas, electric, or telephone accounts in the minor’s name."

Parents interested in safeguarding their children's future creditworthiness don't have many options. ABC6-Philadelphia advises parents to regularly check with the three credit reporting agencies [6]—Experian, TransUnion, and Equifax—and the Social Security Administration if their child's SSN has been used.

♦ Photo by the Lawleys/Flickr [7]

Thumbnail: