In the intricate web of financial transactions, tax season unveils a concerning trend — the alarming growth of child identity theft. As adults diligently prepare their tax returns, the vulnerability of children’s personal information becomes increasingly exploited. Continue reading to learn about the contributing factors to the surge in child identity theft during tax season, examining the unique risks and consequences that this phenomenon poses.

Reasons for Increased Risk of Child Identity Theft During Tax Season

The heightened risk of child identity theft during tax season is primarily due to the enticing incentives, easy access to children’s information, and lower detection rates.

Temptation of Tax Credits and Refunds

The promise of financial gain incentivizes identity thieves to exploit the vulnerability of children’s personal information. As adults, we eagerly seek tax-related benefits. Criminals recognize and see the opportunity to target the unsuspecting identities of minors for their financial gain. Most tax returns and refunds get approved well before the tax form is analyzed, allowing the perfect opportunity for criminals to take the money and run.

Easier Access to Your Child’s Information

Your child’s information is not something to just be thrown into a file or holder. It needs to be kept with important documentation, such as birth certificates, which would typically get passed over once a child turns 18. If you decide to get rid of important documents, shred them before disposing of them. If your computer or phone contains personal information about your child, delete and wipe clean before getting rid of your computer or cell phone.

Be wary of the content that is posted on social media. A simple data breach involving your child’s school, doctor’s office, or other official agencies can put your child at risk of their information becoming exposed. Help protect your children by limiting what you post online as well as what they share online as well.

Lower Detection Rates

The surge in tax-related activities creates a chaotic environment, allowing identity thieves to exploit the distractions.. Often, this activity may go unnoticed or receive delayed attention due to the size of the financial institution or tax agency. This can enable criminals to manipulate the needed information without immediate detection.

Many parents may also be unaware of the likelihood of this crime occurring. Due to the child having no credit history, these actions often go overlooked.

How to Help Protect Your Child During Tax Season

Being mindful and aware are the most simple ways to help protect your child during tax season. Taking precautions and investing in protective measures can help mitigate the risk of potential identity theft. By taking these preventive steps, you can significantly help reduce the vulnerability of your child’s identity.

Parental Awareness and Monitoring

It is extremely important to be cautious when sharing your children’s information. Remain up to date and informed about potential scams targeting children and educate your child on the importance of online safety. Information such as Social Security numbers, birth certificates, and other sensitive information should all be handled extremely carefully.

Access to these physical documents should be very limited and protected. Not only should the physical documents be protected, but online sharing should be kept minimal regarding personal information. Monitor their credit reports regularly, even though they may not have an extensive credit history. Utilize available security features, such as credit freezes, to help add an extra layer of protection.

Tax Filing Precautions

When filing your taxes, opt for a well-established and reputable tax filing platform, whether that be in-person or online. It is important to verify their security features to help ensure the protection of your sensitive information. Inquire if they use multi-factor authentication and encryption features as additional security.

Additional Protective Measures

In previous years, it was a common occurrence for parents to give out their child’s Social Security number to the doctors, an after-school program, or even a sports team. However, you no longer need to. You can protect and hide your child’s sensitive information to help prevent negative effects from taking place. Placing a freeze on your child’s credit report is another way to help enhance protection. This restricts access to their credit file and acts as a deterrent against unauthorized attempts to exploit your child’s financial identity.

If you discover or suspect your child’s identity has been compromised, you need to report it to the Federal Trade Commission and the International Revenue Service immediately. Taking precautionary measures by investing in IdentityIQ credit monitoring and identity theft protection services help provide protection with real-time identity monitoring alerts.

Bottom Line

There are intricate dynamics that contribute to the escalating threat of child identity theft during tax season and the importance of protecting it. The allure of tax credits, refunds, and the easy access to children’s information creates a massive target for identity thieves. The lower detection rates during the tax season further push the lure to this crime. It is imperative to limit information sharing, monitor your credit reports, and educate both you and your children about the risks of child identity theft during tax season.