Today, U.S. Senator Tim Scott (R-SC) and a bipartisan group of cosponsors introduced the Protecting Children From Identity Theft Act, legislation that will help prevent children’s identity being stolen by a type of theft known as “synthetic ID fraud.” A recent study found that one in every ten children had their Social Security Number (SSN) used by someone else to fraudulently open bank accounts or credit card accounts, negatively impacting a child’s credit before they even become adults. Original cosponsors of the bill include Senators Bill Cassidy (R-LA), Claire McCaskill (D-MO), and Gary Peters (D-MI).
“It is simply inconceivable that a criminal would seek to exploit a child’s identity and personal information for their own financial gain, and we must look to utilize all of our resources to stop these crimes from continuing to negatively impact our families,” said Scott. “This upgrade to Social Security Administration procedure is a commonsense and effective way to cut down on synthetic ID fraud and help prevent millions of people from having their identity stolen.”
“Some children have their identities stolen before they can even talk,” said Cassidy. “This bill protects them and modernizes fraud detection to stop more people from becoming victims.”
“Scammers have left no stone unturned in stealing children’s Social Security numbers to open fraudulent credit cardswrecking kids’ credit scores before they’ve even graduated high school,” said McCaskill, a former Missouri State Auditor. “When it comes to protecting Missourians’ hard-earned savings, and their identities, we need every tool available to stop this theft. This legislation would do just thatby bringing the Social Security Administration into the modern era with better verification steps to protect consumers.”
“Lenders can and should do more to protect Michigan children from identity thieves who ruin their good names and credit by taking out fraudulent loans,” said Peters. “This commonsense, bipartisan bill will give lenders the tools they need to verify identities, stop billions of dollars in losses from fraud, and put Michigan children on the path to a secure financial future.”
Scott’s amendment aims to stop this illegal activity by directing the Social Security Administration (SSA) to accept electronic signatures as consumer consent for financial institutions trying to verify customer ID and root out synthetic ID fraud. According to a recent study, children’s identities were stolen at a rate of about 50 times more frequently than adults. Data showed that the information was utilized by identity thieves to apply for loans, utility accounts, property accounts, driver’s licenses, and vehicle registration. The long-term consequences can leave children and families burdened with unintended debt, and a flawed credit history.
Last month, this same group of senators sent a letter to SSA’s Acting Commissioner urging that the agency accept individuals’ consent electronically in order to help financial institutions better prevent identity theft and fraud. The full text of the letter can be accessed here. The senators have also asked Senate Banking Committee Chairman Mike Crapo (R-ID) for inclusion of this bill in S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, which is being debated in the Senate starting tomorrow.
Overall, the problem with synthetic ID theft has become more prevalent and costlier over the past few years. A recent study predicted that financial losses attributed to synthetic ID theft have doubled since 2014, and losses have been estimated at nearly $6 billion. Last year in Rock Hill, South Carolina, a man was accused of submitting “more than 750 new credit card applications to financial institutions via the internet and by telephone, using synthetic identity information,” a crime that ended up costing $340,000 in financial losses.