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Skeletons in the Credit Closet A growing number of cash-strapped parents are stealing their kid's identity. The debt is piling up.

Lisa Barraza's seven-year-old son is a typical youngster-minus one major detail. Since the age of one, he's racked up over $100,000 in credit card debt. How can a grade-schooler apply for credit cards and spend that kind of cash?

 

Obviously he can't, his mother says. Barraza first learned of her son's debt problems when she found a Discover card in his name while divorcing the boy's father. "My son's social security number was hijacked," Barraza says.

The child's father allegedly used the Discover card, which now holds a balance in excess of $60,000, in conjunction with other ill-gotten credit cards to amass a debt she says her son will never be able to pay.

Barraza's story is part of one of the dirtiest secrets in the world of identity theft. Reports of parents stealing their children's identity to obtain credit cards are growing at an alarming rate-affecting infants to college students. Consumer advocates and credit counselors receive calls from new victims every week. Lawmakers are taking notice. Debates rage in several state capitols over measures that would increase the penalties parents face if charged with child-identity crimes.

Howard Dvorkin, president of Consolidated Credit Counseling Services in Fort Lauderdale, says parents who have trouble managing their own finances are often tempted by the lure of easy, but illegal, credit. "People are struggling," he says. "Desperate acts and desperate times often go hand in hand. I don't think any parent in America is out to intentionally harm his or her child. But old habits are hard to break."

Dvorkin says cash-strapped parents often start by using their child's name, social security number and birth date to apply for a card that seems innocent, like a gas card. After realizing how easy the process is, the parent begins to apply for more credit cards, and their debt burden soon skyrockets. The end result of a parent abusing their children's finances, Dvorkin says, is usually the "complete, unadulterated destruction of the child's credit."

According to the Federal Trade Commission, six percent of the 86,168 identity theft crimes reported in 2001 were committed among family members. Though the organization does not break down its data to indicate the number of parent-child cases, Joanna Crane, program manager of the FTC's identity theft program, says she has received an overwhelming number of inquiries into the issue in recent months.

Advocates say parents can destroy their children's future by ruining their credit. "This crime borders on child abuse," says Jay Foley, director of consumer and victim services for the Identity Theft Resource Center in San Diego, CA. "Imagine being 18 years old and finding out you can't get a student loan for college because one of your parents has burdened you with $70,000 in debt. Instead of getting an education, you end up being a general laborer for eight or nine years, paying off mom or dad's debts."

In these instances, cleaning up a victim's credit is harder than with the average case of identity theft case. Most children do not want to see their parents in legal trouble, especially when jail time is involved. A victim, however, must file a police report to get a credit bureau to modify their credit report.

As a result, most parent-child identity cases go unreported and are resolved by the families themselves.

Many experts agree the problem will likely get worse before it gets better. "As sad as it is, heightened awareness of child identity theft may induce other credit- weary parents who might not have thought of it otherwise to commit the crime," the FTC's Crane says.