Child identity theft: Is a youth bank account safe?

Read transcript [of video: Protect your kids from identity theft (Opens Popup)]

In the early days of the internet, hackers and financial fraudsters would pose as stranded travelers or long-lost acquaintances and email unsuspecting recipients to ask for money that would help them out of a bad situation.

As technology and tech users have become savvier over the years, so too have the scammers who are trying to get your personal information. Email remains the primary channel of contact, but websites and apps are a close second, according to a 2022 Federal Trade Commission (FTC) fraud report.^{See note1} Texts, phone calls and social media are also on the list.

Kids – especially those who are just beginning to learn about financial risks and responsibilities – can be prime targets. If you're considering a youth bank account for your child, here's what parents need to know about child identity theft and how to protect your bank account from hackers.

Child identity theft is a real thing.

Cyber criminals aren't picky. Whether it's from adults or children, they're on the hunt for any personal information they can get their hands on – Social Security number, name and address, date of birth – to use to their financial advantage.

In fact, it may be even more advantageous if the information is a child's, because there isn't likely to be a credit history connected to it. Fraudsters will combine a child's Social Security number with a different date of birth to create a synthetic identity.

With this fake identity made up of partially real information, they can try applying for credit or taking out loans. Because it's a child's personal info that's been stolen, the criminal could potentially avoid detection for years, or at least until that child's parents realize that a credit report in his or her name already exists.

How parents can spot the red flags

Are bills coming to the house with your child's name on the address label? That's a warning sign that their personal information has been compromised. Here are a few more signs of child identity theft from the FTC.^{See note1}

• You're denied government benefits because someone is already receiving them with your child's Social Security number.
• A preapproved credit card offer in your child's name arrives in the mail.
• Calls from collection agencies reference accounts in your child's name that you didn't open.
• You receive IRS letters about taxes that your child owes.
• A traffic violation notice is sent to your child.
• Your child is asked to verify employment at a place where they have never worked.
• Your child applies for a student loan and is denied due to poor credit history.

If you suspect that your child's identity has been compromised, you can check to see if a credit report in their name exists. If it does, you should notify the FTC, each financial institution that has fraudulent accounts in your child's name and all three of the credit bureaus.^{See note1} If your child is younger than 16, you can place a security freeze on their credit report that will remain in place until you or your child removes it. This will help protect their information from being used fraudulently again.

Are youth bank accounts safe?

Youth bank accounts are designed to teach children and teenagers how to responsibly manage money. Like all bank accounts, personal information is required to open them, including your child's Social Security number.

For your peace of mind and to help keep your family's finances safe, look for institutions whose youth bank accounts have security features that will let you know about suspicious activity as soon as possible.

A USAA Youth Spending account is a checking account that comes with tools that help parents monitor how it's being used, including:

• Text alerts on the balance
• Control over debit spending limits
• Permissions to make deposits or transfers
• Access to the account on usaa.com or the mobile app (children may access their USAA account starting at age 13)
• 24/7 fraud monitoring service
• Debit card lock/unlock feature if your card is misplaced

These same features are available with the USAA Youth Savings account. With these protections in place, you can keep your child's bank account safe while still helping them to learn valuable lessons about budgeting their money and becoming financially independent.

Steps to help protect your child's identity

That security freeze mentioned above? You don't have to wait until something goes wrong to request one. If your child is younger than 16, you can ask each of the credit bureaus to create a credit report for your child and then lock it down. Minors who are 16 or 17 can request this themselves via phone or mail.

This can help you dodge child identity theft attempts because even if personal information has been exposed, fraudsters who attempt to use it to apply for things that require credit checks – loans, credit cards, etc. – will be denied.

Once your child is old enough to legitimately apply for credit, they can contact each bureau to lift the freeze.

Here are a few more tips for keeping your child's personal information secure:

1. Ask a lot of questions. Whenever an institution requests your child's Social Security number, you should ask why, how it will be used or if there are alternative means of identification that can be accepted instead.
2. Protect Social Security cards. There's no good reason to carry your child's Social Security card around. Memorize the number and keep the physical card locked in a secure location.
3. Pay attention to online activities. It's a good idea for you to know the different programs and networks your child is using, and if access to those systems is based on them answering personal questions to establish their online profiles. Sophisticated cyber criminals may not need much more than a name and phone number to do some damage. Check in with your kids, especially if they're new to using technology and getting online.
4. Understand privacy policies. Even adults can be impatient when asked to read and accept terms and conditions before accessing a site or service. Imagine how much more impatient a kid would be. Take the time to read that information and see how personal information might be used.
5. Avoid oversharing. This can be tough in the age of social media, but, again, it doesn't take much for a financial fraudster to get what they need from your child. Many attempts at gathering clues into a person's passwords or security questions are disguised as the latest quiz or game. Help your child set up their social media profiles with as many privacy settings in place as possible.

It takes diligence from both parents and children to help avoid child identity theft. A youth account can be a safe place for your child to keep their money, develop good spending and savings habits, and a wonderful way to introduce your child to banking and personal finance. If you're aware of the possible dangers and utilize the tools and information at your disposal to help avoid them, you can protect your children's information today and help set them up for success in the future.

The USAA Advice Center provides general advice, tools and resources to guide your journey. Content may mention products, features or services that USAA Federal Savings Bank does not offer. The information contained is provided for informational purposes only and is not intended to represent any endorsement, expressed or implied, by USAA or any affiliates. All information provided is subject to change without notice.