Part of building a strong foundation for a child’s financial future is taking steps to minimize the risk that his or her Social Security number, bank account details or other valuable personal information will be stolen. Here are tips to help parents and caregivers protect young people from cyber-related identity theft and financial fraud.
Talk with your child about safe online practices.
Consider discussing the risks of sharing personal information online, including the possibility that someone can gather small amounts of personal information to guess the correct answers to security questions, reset passwords and take control of financial accounts.
“Encourage your young person to be selective with his or her ‘friends’ online, just as he or she would in real life,” said Bobbie Gray, an FDIC supervisory community affairs specialist. “Discuss how not everything they see on the Internet is true, and that some criminals may pretend to be friends or relatives in order to obtain personal information or worse.”
Help your child learn to analyze advertisements, some of which may be fraudulent.
“Explain that advertising, even in an online video clip, is intended to get people to make purchases or otherwise act on things they might not usually do,” said Luke W. Reynolds, chief of the FDIC’s Outreach and Program Development Section. The Federal Trade Commission (FTC) has an online game called Admongo to help youngsters age 8-12 think critically about advertising and make smarter decisions as consumers.
Explain why keeping money in a financial institution is safe.
Checking, savings or other deposit accounts at a federally insured financial institution carry protections related to theft and fraud (see How Federal Laws and Industry Practices Limit Losses From Cyberattacks), making them a safe place for your money. If your child doesn't already have a deposit account, consider opening one. Learn about federal deposit insurance if a bank fails, including how to verify that a bank is FDIC-insured by going to www.fdic.gov/deposit/deposits/. And, to find age-appropriate information and activities for kids plus FDIC “Money Smart” guides that help parents and caregivers talk with their children about key financial topics, visit a website developed by the FDIC and the Consumer Financial Protection Bureau.
Secure electronic equipment.
Make sure your child’s devices are configured to download the latest updates from the manufacturer because they usually include security-related enhancements. Almost all video game equipment connects to the Internet and may link to information such as credit or debit card numbers.
If a company wants to collect data on your child, find out why.
Controlling access to a child’s information is one of the best ways to protect him or her from identity theft. Under a federal law called the Children’s Online Privacy Protection Act (COPPA), websites and online services (including apps) that are directed to children under 13 must notify parents directly and get their approval before they collect, use or disclose a child’s personal information. When notifying you, the company must disclose how it plans to use your child’s information. The company also may ask for your approval of different options for using information it wants to collect, such as whether it can share the information with others or use it for marketing purposes. To learn more, start at the FTC’s Web page “Protecting Your Child's Privacy Online.”
Be aware of possible signs that a child is the victim of identity theft.
Criminals may steal the identity of children to file claims for government benefits or apply for a loan online. “While not necessarily a sign of identity theft, your child receiving unsolicited mail or phone calls from marketers can indicate that personal information has been shared somehow. It’s best to take the time to understand why,” Reynolds noted.
Consider asking the three major nationwide credit reporting agencies — Equifax, Experian, and TransUnion — to check if your minor child has a credit report.
If the answer is “yes,” review the report to find out if a thief has misused your child’s name. For additional guidance, go to the FTC’s “Child Identity Theft” page, which has contact information for the credit reporting agencies and tips if a child’s identity has been stolen, including how to place a fraud alert in a credit report that can minimize future damage.
The FTC adds that it is generally a good idea for parents to conduct this review of credit reports close to a child’s 16th birthday. Doing so allows time to fix errors or other problems before he or she might want to apply for a loan or a job.
For more information and tips on how to protect kids online, visit the federal government’s OnGuardOnline. The FDIC also has Money Smart guides that offer exercises, activities and conversation starters for parents and caregivers to help young people of all ages to learn about money.