Parents are stealing their children's identities to access debt—and destroying their kids' credit scores in the process
Parents are stealing their children's identities to access debt—and destroying their kids' credit scores in the process
"You trust your parents. This is not what they should be doing to their children."
When Axton Betz-Hamilton set up her first utility bill at college, she soon realized something was very, very wrong.
It turned out she’d been a victim of identity theft—and it had destroyed her credit rating.
In 2001, when she was a 19-year-old student, Betz-Hamilton’s new utility provider demanded a $100 security deposit to turn on her service, citing her credit score.
“I thought it was because I didn’t have enough credit,” she told Fortune. But when a copy of her credit report turned up in her mailbox six weeks later, she learned the opposite was true.
Hey now. Adults have been borrowing against their children's futures for generations. It's something of an American tradition at this point.
Maybe that is connected to each subsequent generation having less wealth, lower life expectancy, lower standard of living and generally being more miserable than the previous...
Nah I'm sure it's just coincidence.
Sure, if by "each subsequent generation" you mean millennials. Historically the trend in the US has always been the opposite; most people could count on being better off than their parents.
There are already two new generations since millenials. I'm a millennial and I'm almost 40.
This isn’t new. One of my cousins did this to three of her four kids. 😬 This has been a thing for ages.
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I feel that this can be addressed at application step. Any date of birth proven to be under 18 cannot apply without an in person interview. This protects minors from taking on debt without fully understanding the implications, and puts responsibility on the lender for providing credit to a minor. If credit is provided and defaults the debt should be the lender's problem for taking such a huge risk.
Alternatively, the same premise with the exception that an adult is required as a cosigner. If the account defaults the burden is shifted to the adult as they have the cognizance to understand and take responsibility.
I wouldn't outright ban giving accounts to minors. My parents opened a savings account in my name and kept it in good standing. This gave me a big credit boost that my peers never had. But I realize I am an exception, and the problem others face is very real.
Companies don’t care. I had a collection agency call me before wanting paid for an unpaid Direct TV bill from when I was 13 that my dad had taken out in my name. I had to get him to read the part on Direct tv’s terms stating that no one under 18 can activate service 4 times before it finally registered to him and they dropped it. Still had to get it removed from my credit report too.
AnnualCreditReport.com is free to get your credit report from all bureaus.
All bureaus allow you to freeze your credit when it is not in use.
that's great. but children can't do that, and even if they could, it'd really be their parents.
who are the ones stealing their identities in the first place. Fuck the banks that aren't checking the age, though. You think that would be a massive flag...
They never have. My mom got a phone in my name when I was 10. I born 1980. Also my dad ruined my credit just by living in same household. Did you know you can get bad credit on your report That isn't yours just by an address and similar name?
They don't even need your social to add by credit to you. The system is fucked. I am a Jr so I got all Sr bad debt even had the debt of a guy five states away he had a different middle name then me. We had never met.
Luckily the debt is easy to remove (well not real easy.) Can pay 1000 dollars like I did and they remove it quickly. Or you spend years before hand writing letters to the credit breuers and maybe they remove it.
How I know they don't need your social well my dad owed the IRS and my credit report it had his social security number. It's fucked up.
If only the children knew!
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did she default on your mortgage too?
I suspect this was done to me. I found out my SS and name was used for various utilities related things back when I was a young child. When asked, my parents insisted some OTHER family members must have done it, and they never answered how the hell other family members got my SS when my parents are typically super secretive and protective of info like that.
I still don't believe them.
Easily fixed, report as fraud, dispute and gets removed from credit repont
When she disputed the file with credit bureaus, parts were removed simply because certain creditors had gone out of business. Others, however, didn’t get scrubbed from her history until they aged off—which typically takes around seven years.
Turns out not so much
Oh yes, the credit agencies are known for being so understanding.
My wife found out recently that when she was 5 she apparently opened a credit card that went unpaid. To get it removed was a full time job...
Doesn't credit card debt go away after 7 years? If I'm doing the math right, your wife must be pretty young if it's still an issue.
Possibly, but identity theft cases usually involve much more bureaucracy than just ignoring the debt.
Just because the card was opened when she was 5 doesn't mean that's the last time it was used...
The amount of people in the comments whos parents did that to them is fucked up how is this so common
Please freeze your credit file at Equifax, Experian and TransUnion. It's free and you can unfreeze it anytime you want (or whenever you judge its a valid credit check for something you actually requested yourself).
Whether you have a low/medium/good/perfect credit score and are satified with the credit cards and mortgage/loans you already have or lived without ever having a credit card and loans, it is of utmost importance to freeze your credit files to preempt any future identity theft from becoming a life upending disaster.
Some helpful links:
American Express | How to Freeze Your Credit at All 3 Bureaus—For Free
Federal Trade Commission | What To Know About Credit Freezes and Fraud Alerts
For the fellow Canadians reading this, freezing your credit file has been enshrined in law in Québec since February 2023. I have frozen mine on the first week of February. However, I am unaware of the availability of that option in other provinces, please check with your bank or provincial service bureau (equivalent to Services Québec here) or directly contact Equifax and TransUnion.
So now the youth are being screwed over by their own parents. Cool. Coolcoolcoolcoolcool.
Is this another unprecedented, once in a millennia event too? Just like the previous five or six atrocities?
Anyone else want to fuck up the zoomers while we're at it?
I mean this has been going on since at least the 90's.
Don't remind me.
The 90's were pretty wild in terms of what was considered "normal" or "okay".
Given that you require 3 step authorization just to access your bank, there is no reason credit card companies should be giving out credit cards so easily in this day and age based on name alone. Heck setting up an account for a phone is more secure than credit cards and I think what these companies are doing is intentional so they can legally ruin people and absolve themselves of any unethical behaviour.
20 years ago I worked as a bill collector. The company I worked for would buy out the accounts that the primary company felt they couldn't collect on and have basically given up. So we'd buy your debt (at a steep discount) and then try to collect from you.
It disappointed me the number of parents I talked to who not only committed fraud on their own kids but legit did not care, zero remorse. Some of them would even laugh at me and say "well they're only three so what are you going to do!?".
I felt so bad for the kids. Those are the kids that are entering college and the workforce right now.
Paywalled
Well this is new... article is blurred and unreadable and doesn't even offer a paywall pop-up.
that's fucked
Why would any child need to take out a bank loan anyway? I feel like this is an easy fix by setting an age limit.
Cause a 19 year old can live by themselves, and is an adult? If you're an adult and you're expected to be financially independent, loans are an important part of that. They need a car, rent, unexpected bills, etc.
And this is news how?