New law to protect child credit now in action
With the New Year begins a new law that all parents should understand.
For the purpose of security, parents and guardians can now freeze the credit of their children under 18 years of age. The freeze prevents identity thieves from taking out loans and building up debts under the child’s name. As of the New Year, Credit Bureaus can now freeze a child’s credit report under the request of a parent or guardian.
The law started out as House Bill 607, primarily sponsored by Rep. Graig Meyer (D-Orange) and Rep. Jon Hardister (R- Guilford).
“This bill didn’t get much coverage when it was first passed, probably due to the fact that it passed unanimously and was non-controversial,” Hardister wrote to YES! Weekly. “But it is a very good, important policy change.”
Meyer said a part of his motivation was that bills to freeze children’s credit had been enacted in other states. When he checked to see if North Carolina had anything similar, he was disappointed to see that no such law existed.
“I reached out to the Attorney General’s office and heard from them a couple of stories of people that they have worked with where child identity theft had been a problem, so I knew it was a real issue here,” said Meyer.
A challenge Meyer held up was that victims often catch the crime years after its occurrence.
“One of the examples th at the Attorney General’s office told me was about a mother and son who went to enroll in college and were denied student loans,” Meyer said. “The son’s credit was ruined and that was because his identity was stolen years before and they never had any idea till that point because why would you check your child’s credit until you go do something like that?” Hardister believes the issue of child identity theft has gotten worse over the recent past.
“Identity thieves are targeting children more often because children usually have no established credit, which can make it harder to detect fraud,” said Hardister. “In 2013, the U.S. Department of Justice released a study indicating that over 1.5 million children are victimized by identity theft each year in the U.S.”
An important highlight is that this law is not just for parents and their children, but for guardians as well.
“If you were say, a caretaker for a parent with dementia or a sibling who is mentally disabled, you can also use this to protect their identity,” said Meyer.
“Given the amount of elder fraud and other challenges that are similar that are going on, I think that’s pretty important.”
While the new law provides some protection for those under guardianship, Meyer believes there are still issues that laws have yet to fix.
“There are times where parents and guardians actually use their own child’s credit,” said Meyer. “Then the child ends up with bad credit when they become independent. It’s not clear what legislation we can use to address that because it is in fact the parents legal right to use their child’s identity how they want to. It’s just unfortunate some of them are doing that. We need to think about what we can do to prevent that or allow a child whose parents ruin their credit to have some means of redress.”
For now, this new law is there for those who need protection.
“The government has a responsibility to protect public safety, which includes protection from identity theft,” said Hardister. “With computer technology becoming more advanced, hackers are finding new ways to steal people’s identity. That is why we need to adapt to changing circumstances and continue working to protect people from identity theft.”
To apply for this security, a parent or guardian must contact each of the three credit bureaus. They need to apply with each of the three, making a separate application for each. There is a $5.00 fee for each freeze, unless the child has been victimized by identity theft, in which case the fees are waived.
The North Carolina Department of Justice has detailed guidelines for child credit freezes on its website: http://www.ncdoj.gov/Protect-Yourself/2-4-3-Protect-Your-Identity/Protect-Yourself/Freeze-Your-Credit/Children-s-Security-Freezes.aspx. !