Tax Fraud Using Children's IDs Is on the Rise

Many parents find out their kids are victims of identity theft when they file their tax returns. Learn how tax fraud can impact your children and how to protect your family.

Tuesday, March 06, 2012

Parents today are more vigilant than ever, cranking up home Internet controls to the highest, least permissive settings, restricting cell phone plans, and even monitoring their kids’ social media accounts.

Still, it’s hard to protect our children from all threats. Tax season serves as a reminder that tax-related identity theft can affect both parents and their kids. Indeed, the CyberScout fraud resolution center reported a tenfold increase in such cases in February 2012 compared with the previous month.

Shelly Waldman* of Michigan was stunned when she learned that her oldest daughter’s Social Security number had been stolen to commit tax fraud. Like other parents of children who are victims of this crime, Waldman faced two immediate challenges:

1. How to protect her child’s stolen identity. 
2. How to get her tax refund.

“When my accountant told me, I said, ‘Are you kidding me?’ ” Waldman recalled. “I was panic-stricken.”

Fortunately, Waldman received CyberScout LifeStages™ Management Services through her insurer. Her insurance company’s customer service representative immediately connected her to a CyberScout fraud investigator dedicated to handling her case until it was resolved.

Taking immediate action, the investigator:

• Conducted a complete interview to establish the timeline of events.

• Coordinated a joint call with Waldman to TransUnion to check credit files for family members included on her tax return. Minors don’t typically have credit files. If they do, it’s a strong sign their personal information has been used to open a new line of credit, and action must be taken.

• Warned potential creditors that Waldman and her husband may be victims of identity theft by placing an alert on their credit files.

Fraud investigator Mark Fullbright “has been fabulous, very calm, and reassuring,” Waldman said. “Now no one can open a credit card account or anything with [my daughter’s] information.”

Finally, Fullbright assured Waldman that IRS identity theft investigations normally take at least six months, and that, despite the headache, most victims end up with their rightful checks.

“My husband and I filed early this year as we always do,” Waldman said. “We were anticipating a huge refund. We count on that money.”

Fullbright will monitor the status of Waldman’s identity theft claim with the IRS to make sure she’s on track to receive her refund within the established timeline.

In the meantime, Waldman said she’s comforted to have CyberScout’s services.

* Name has been changed to protect customer’s privacy.


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If you need identity theft assistance, call your provider organization to be put in touch with the CyberScout Resolution Center. More information for individual consumers.