Another challenge for foster children
— identity theft
By
Kristina Horton Flaherty
Staff
Writer
Kareena
Blackmon lived in 14 different foster homes, endured abusive treatment,
attended four high schools and struggled with a sense of isolation as a child. Now
22, she recalls “counting down” the years until she could set out
on her own — in spite of the new challenges she might encounter.
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Former foster child Kareena Blackmon was bedeviled by
credit problems after her identity was misused.
Photo by Robert Durell
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But
it never occurred to her that identity theft — and, in turn, a poor
credit report with several thousand dollars in unfamiliar debts dating back to
her grammar school years — would be among them. Nor did the Fairfield
woman expect her undeserved credit problem to dog her for so long.
“I
thought if I just told what happened, a lot of them would go away,”
recalls the struggling college student, who has never been able to get a car
loan, student loan or credit card.
And
Blackmon’s situation is not unique, youth advocates say.
But
the results of a recent Los Angeles County pilot project, led by the California
Office of Privacy Protection, may trigger earlier intervention for
California’s foster children in the future. During the year-long project,
county and state officials worked with the three credit reporting agencies to
set up a streamlined process to do credit checks on 2,110 foster youth, ages 16
and 17, via a new secure website. Then they successfully cleared every
troublesome account.
The
credit checks turned up 104 children — five percent of the group — who
had a total of 247 accounts that could have caused them future problems,
officials say. Account balances averaged $1,811 and topped out, in one case, at
$217,000 for a home loan. In some cases, simple error was to blame.
Harvey
Kawasaki, the Youth Development Services chief for Los Angeles County’s
Department of Children and Family Services, said he was surprised the project
didn’t turn up more problems, based on the identity theft estimates he
has heard in the past. But “any number is too high,” said Kawasaki,
whose department participated in the project. “It’s just wrong for
foster kids to have bad credit reports.”
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Joanne McNabb |
Joanne
McNabb, chief of the California Office of Privacy Protection, points out that
the exact identity theft rate for those in the pilot project remains unknown, and
could range from a couple percent to “double digits.” In all, 17
percent of the teens were linked to credit records in some way, but only five
percent actually had fraudulent or erroneous accounts. The others simply had
records loosely linked to them through their Social Security numbers alone for
unknown reasons, including possible identity theft.
With
limited exceptions, children should not have credit records at all, McNabb
says. “They shouldn’t be able to be victims of credit identity
theft,” she says. “So the idea that they might be being victimized
at roughly the same rate as adults is appalling.”
According
to McNabb, the most recent study on adult identity theft found a rate of 3.5
percent. Little scientific data exists on the incidence of child identity
theft.
But
some say identity thieves may actually target youngsters. Children typically
have no credit records, which makes it easy for such thieves to link a
youngster’s unused Social Security number to another name and birth date.
In addition, parents and guardians often see no reason to suspect a problem,
which means the theft can go undetected for years.
“Unfortunately,
minors’ identities are particularly appealing to fraudsters because their
personal data is untainted, legitimate and less likely to be monitored for
misuse,” said Tom Oscherwitz, chief privacy officer at ID Analytics,
which recently conducted a child identity theft study that turned up more than
140,000 possible identity fraud victims out of a pool of 172,000 children
enrolled in an ID Analytics consumer alert service.
Another
recent study found that 4,311 children — 10.2 percent of the children
enrolled in an identity protection service following a data breach — had
loans, property and other accounts associated with their Social Security
numbers. They were also 51 times more likely to be victims of identity theft
than the adults affected by the same data breaches, according to a Carnegie
Mellon CyLab report released earlier this year.
Foster
children may be even more vulnerable to such problems because their personal
information passes through so many hands, a Federal Trade Commission official
told a Congressional subcommittee last month. Child advocates also stress that
former foster youth often do not have a support system to help them resolve
such problems. And in some instances, the suspected identity thief is the
youth’s own family member or foster parent, creating a more complicated
situation and often some reluctance to file a police report.
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Rachel Sanders |
Attorney
Rachel Sanders, who runs a program that provides free civil legal services to
foster youth in transition, says identity theft is a “huge portion”
of the program’s caseload.
“This
is a population that overwhelmingly ends up homeless or incarcerated after
exiting the system,” said Sanders, the staff attorney for the Alliance
for Children’s Rights’ NextSTEP program in Los Angeles.
“Something that seems as small as a debt can be a major bar to the basics
of life, like housing.”
In
less than three years, Sanders and the program’s volunteer pro bono
attorneys have handled some 100 identity theft cases. And roughly half of them
turned up simply because Sanders suggested running a precautionary credit check
for a young person. In one instance, she advised a client not to carry around
her Social Security card and the client mentioned that she had left her wallet
in a taxi the year before. A credit check turned up multiple unknown accounts.
“It’s crazy,” Sanders said. “It’s really scary to
think of all those youth who aren’t making their way to us.”
Most
of the foster youth who come to NextSTEP have never had their credit checked.
In one case, however, a 16-year-old boy showed up in Sanders’ office
after a social worker found a $50,000 child support judgment on his credit
report. As it turned out, the boy’s undocumented father had apparently
used his son’s Social Security number to get a job and then had had his
wages garnished for child support. Eventually, the boy’s credit record
was saddled with the outstanding support debt for his own siblings.
“That
one was pretty easy to clear up,” Sanders said. “It was clear that
a 16-year-old could not have fathered a 12-year-old.”
In
another instance, a former foster youth came to her after being turned down for
a small business loan. A credit check revealed that someone had used his
identity to rack up at least six medical bills at various hospitals miles away
from his home. To resolve the problem, Sanders’ client had to sign some
HIPAA privacy waivers even though the medical information had nothing to do
with him, and eventually the accounts were cleared.
To
have social workers routinely do earlier credit checks on foster children
“could only help,” Sanders said. “It would catch it before
they’re out of the system.”
Pending
federal legislation reintroduced last month — the Foster Youth
Financial Security Act of 2011 — would require annual credit checks
on foster children and follow-up assistance if necessary.
A
2006 California law, however, already requires county social workers to request
credit reports for foster children at age 16 and to refer those teens to
counselors if problems turn up. But state and county officials say a lack of
funding and procedural flaws with the mandate have delayed its implementation.
Officials
say the pilot project was designed to test procedures for achieving the
law’s intent. Checking each child’s credit typically requires
sending letters and copies of each child’s identifying documents to all
three credit reporting agencies, an overly burdensome task for social workers,
they say. So one of the biggest challenges was to find a secure way to transmit
such sensitive information in bulk without further jeopardizing the foster
children.
“We
didn’t want to create more fraud by not securing this information,”
Kawasaki said.
The
project’s final report recommends expanding the program statewide and
centralizing the transmission of all such credit report requests into a single
mass list (or possibly two). The Los Angeles Department of Consumer Affairs
would then handle the remediation for Los Angeles’ foster children. And
the California Office of Privacy Protection would clear up the records of
foster children in all other counties that need such assistance. Pending state
legislation would pave the way for such a process.
But
the report also recommends that the credit reporting agencies come up with a
way for parents and guardians, as well as foster care agencies, to flag or
suppress children’s identities in their systems. (Only one of the
agencies currently has a way to do this for child identity theft victims.) And
it suggests developing a secure, automated procedure for requesting
minors’ credit records as well.
Blackmon
was 18 when she first discovered her credit problem. At the time, she was
living in transitional housing in Vallejo, working full-time and taking
independent study classes toward her high school diploma. She had applied for
credit cards but had been turned down every time. Then, in opening a bank
account, she recalls, she signed up for a program that sent her a copy of her first
credit report.
Alarmed
by what she saw, she quickly called the collection agencies and managed to get
the largest debt, an unfamiliar $1,000 phone bill, removed by simply faxing off
copies of her identification and Social Security cards. But the remaining
creditors wanted police reports and a lot more paperwork. “I just gave up
at that point,” she recalls.
She
also figured, she said, that the debts would eventually go away and she thinks
they have. But her low credit score has not. At one point, unable to secure a
car loan, she had to take a taxi cab to her minimum-wage hotel clerk job
whenever her early or late hours conflicted with the bus schedule. She also
discovered that her many failed attempts to get a credit card likely lowered
her credit score even further. And while she was unemployed for four months
without any safety-net credit, a few of her own bills, including one for her
braces, wound up in collections as well.
These
days, Blackmon worries that her poor credit record might even derail her career
goals. She currently works as a foster youth advocate for Solano County and
attends Napa Valley College. But someday, she says, she hopes to become an
accountant and work for the Internal Revenue Service.
“I’m
sure I’ll at least have to have a good credit score,” said
Blackmon, who would like to see earlier intervention for foster children in the
future. “In the long run, this affects the young person for years.”
To
see the full report, entitled A Better Start: Clearing Up Credit Records for
California Foster Children, go to privacy.ca.gov/res/docs/pdf/Foster_Youth_Report_FINAL.pdf