STEALING YOUR CHILD’S CREDIT

By Abigail Goldman

Monday, Dec. 11, 2006 | 7:55 a.m.

The crime began with a phone call: Jason's ex-wife, dialing in to check on the couple's 5-year-old son, who was home with his father when the phone rang. Oddly, the boy's name flashed across the caller ID window, but Jason thought nothing of it.

Mistake.

Today, three years later, the Las Vegas father recognizes this call as his first taste of something truly dismal: His ex-wife, who had filed for bankruptcy, used their child's name and social security number to buy a cell phone. Then she stopped paying the bill.

Jason found out when his son turned 6 and received a credit agency collection notice for $344.

As identity theft goes, the scam was particularly nefarious - abusing the name of your own child. Unfortunately, children are increasingly becoming victims of this kind of identity theft.

Nevada ranked second in the nation for identity theft from 2003 to 2005. Just 3 to 4 percent of people who reported the crime in the state were minors, according to the Federal Trade Commission. But for a combination of reasons, the actual number of child victims is likely to be much higher, said Linda Foley, founder of the nonprofit Identity Theft Resource Center.

Children are too young to discover the fraud themselves. Also, their parents can be reluctant to report a fraud within the family. Surveys conducted by the commission last year revealed that almost one-third of those identity theft victims who know the person responsible are swindled by a family member or relative.

Foley estimates that a quarter of calls made to her San Diego advocacy organization are related to child identity theft cases.

During an interview with the Sun, not halfway through hearing about Jason's situation, Foley sighed and said, "Let me guess, the father found out when the kid's name came up on the caller ID."

She sees it all the time.

Jason spent months trying to clear the debt. The first collection notice was sold to a second collection company, who added another fee and was doubly determined to collect. With every notice, Jason made another round of calls, begging the creditors, the phone company, even the police, to sit down and square up the bad debt. They wouldn't.

So finally Jason, who agreed to talk to the Sun only if his last name was not published, marched the boy to a cellular telephone store. He demanded that a manager call up the outstanding bill from a computer and read aloud the account information. The manager obliged, and Jason fumed.

"Well, that name, with that social security number," Jason yelled, pointing, "is this 6-year-old kid right next to me."

Children, as it happens, are almost made for identity theft. Without any credit history or personal paper trail, their financial identities are blank slates. Thieves open credit lines in a child's name and get away with it for years, Foley says. Who's looking for a kid's credit card receipts?

People who have fraudulent accounts opened in their names report spending more than four times the money and five times as long straightening out finances as victims who had existing accounts plundered, according to a 2003 survey by the commission. People with established banking histories, namely adults, are apt to investigate their finances periodically, and are more likely to discover the theft sooner than victims who don't monitor income, like kids.

Credit card companies aren't exactly making things difficult for thieves, Metro's identity theft expert Michael Campbell said.

"If business practices weren't the way they were now, ID theft would be a heck of a lot harder," Campbell said. "We have made things so convenient nowadays, it just makes it that much easier to victimize."

The Internet yields a wealth of personal information savvy thieves can access, and now that children are assigned social security numbers in infancy, the window of opportunity is wider. The Identity Theft Resource Center once managed the case of a 3-month-old baby whose identity was stolen by a hospital nurse. The parents knew something was wrong when their infant was mailed a bill for extensive back injury treatments.

The long-term ramifications of identity theft are still way off for child victims, Foley said. When they're old enough to apply for jobs, their own bank accounts or a car, the fraudulent credit history could come back to haunt them.

Bernie Sahadi, an ex-Marine living in Santa Monica, discovered his ex-wife applied for three credit cards in their daughter's name, then ran up $400 to $1,500 in debt on each. Sahadi wasn't surprised. He divorced his wife in 1996 because she cleared $100,000 out of his mutual fund while he was deployed during Operation Desert Storm.

Sahadi spent months clearing up fraudulent charges, gritting his teeth while sharing joint custody of their two kids. Sahadi's wife was arrested only after she was caught stealing $125,000 from an Alzheimer's patient in the nursing home where she worked. She served eight months of a five-year sentence.

When the ex-Marine would talk to his kids about it, all they asked was, "Dad, why are you putting mom in jail?"

Sahadi wrote his response in a small diary. He has detailed every moment of the entire identity theft affair in the journal, which he'll offer to his kids when they turn 18. Until then, neither he, nor Jason, is attempting any explanation.

Both fathers quietly "froze" their children's personal information, setting up a fraud alert system that gives warning any time someone attempts to get credit in the child's name. The children will have to "thaw" their own identities when they want to apply for credit as adults, deactivating the warning system days before any big purchases.

Jason, who still shares custody of his son, submits the boy to credit checks. Like many parents of identity theft victims, he's half-hearted about calling police on the mother of his child, even though he's not sure she won't try again.

Sahadi has remarried, but the burn remains. He keeps his bank account separate from his second wife, although they contribute to "major purchases" together.

"If you must trust somebody else," he said, "you need to review."