Kroll Fraud Solutions Blog – A Dialogue on Data Security

Earlier this summer, Citigroup Inc. announced that they had discovered a security flaw in their mobile banking application for iPhone. The flaw caused user’s data to be saved directly onto the phone in a hidden file, and was fixed with an update release. They notified more than 110,000 affected users, pointing out specifically that this was not a breach of data – according to their statement, “we have no reason to believe that our customers’ personal information has been accessed or used inappropriately by anyone; i.e., there has been no data breach.”

Problems like the theft or misuse of a child’s Social Security Number (SSN), whether through the use of a CPN or some other means, can often raise questions about child identity theft. Unfortunately, our Licensed Investigators have seen and heard a lot of advice that we consider to be incorrect, or at the very least, misleading. We’d like to share a few insights regarding some of the questionable statements about child identity theft that we’ve come across:

1. Myth: A child may never be able to repay the debts that are created by the identity thief.

As we explained in yesterday’s post, the use of the so-called CPN that’s tied to a new SSN poses significant dangers to the victim, particularly if he or she is a minor. One of the reasons minor identity theft is so difficult to deal with is because it’s generally not caught until the child turns 18, which is usually the first point at which they apply for some type of credit. A thief can use the number for many years and pile up significant debt because of this. It’s also very difficult for lenders and other financial institutions to catch this type of crime, because there’s no existing credit file associated with the child’s SSN. In fact, there is no easy way to determine with certainty that any particular SSN actually belongs to a minor, although that may be changing.

A recent story by the Associated Press (AP) details a purportedly new identity theft scam involving “dormant” Social Security numbers (SSNs)—that is, numbers issued but not yet used for credit purposes. The article explains that so-called businesses, generally under the guise of a credit repair organization, sell these numbers by calling them credit privacy numbers (CPNs). They make false claims about your “right” to use a number other than your SSN when applying for credit. There are even how-to videos on the web touting the use of these numbers to obtain a “fresh start” for your credit – a way to hide your current bad credit rating and start anew. The problem with this is, according to the FTC, it’s completely illegal.