New York State Assembly Consumer Affairs Committee Chair Jeffrey Dinowitz (D-Bronx) announced today the passage of legislation that he sponsored along with Senate Consumer Affairs Committee Chair Lee M. Zeldin (R-Suffolk) in both the Assembly and the Senate that would allow parents and guardians to freeze the credit record of their children in order to prevent identity theft (A.8955-B/S.6682B). This measure has become increasingly necessary as a 2011 report by ID Analytics, an identity theft protection firm, noted that an estimated 140,000 minors are at risk of falling victim to identity theft every year. Moreover, a 2011 study, from CyLab, a research center at Carnegie Mellon University, examined 41,000 children who were registered with a commercial identity protection service and found that 10% of them had someone else using their social security number.
Currently, New York State law only allows a parent to freeze a child’s credit if a credit file already exists in the child’s name. However, more often than not, the reason a file exists at all means that the child has already fallen victim to identity theft. This measure would allow parents to enact a freeze without an existing credit report on file for a child, significantly reducing the risk of child identity theft.
“This bill gives parents the ability to take proactive steps to protect their child’s identity and their credit information. Child identity theft can go on for years without a parent realizing it is occurring and this can have harmful effects on the child’s credit report,” Mr. Dinowitz noted. “This can lead to serious problems later in life for the children when they apply for student loans, try to find a job or attempt to build their credit. Parents have every right to freeze their child’s credit and stop a potentially horrible situation from ever occurring.”
“With today’s constant stream of data-sharing and the 24-7 use of technology to store personal information, reports of identity theft have soared and children are quickly becoming the number one target,” Mr. Dinowitz said. “Knowing that a child will not be applying for credit cards or taking out loans for many years, criminals see a window of opportunity for credit abuse that can take place for a long time before anyone is made aware of the fraudulent activity. It is more important than ever for parents to have a way to shield their children from the lingering and detrimental effects of identity theft. This legislation will allow parents to freeze their child’s credit report, prevent child identity theft and help New York push back against a rapidly growing problem.”
This legislation would require credit reporting agencies to place a credit record freeze on a child’s account at the request of parent or guardian. Following the freeze, a consumer reporting agency would be prohibited from releasing the child’s credit report or any information included in the report to any third party, with a few minor exceptions as required by law. The credit freeze could be removed at the request of the parent or guardian or by the child once he or she turns 16 years old.
The bill would align New York State law with that of several other states – including Maryland, Wisconsin, Delaware, Illinois, Michigan, Texas and Oregon – that already have statutes requiring credit reporting agencies to allow parents or guardians to freeze their children’s credit even when no file exists. States such as Florida, Virginia, Indiana and Pennsylvania all have similar statutes pending.