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MCLE Self-Assessment Test

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.

Kareena Blackmon

Former foster child Kareena Blackmon was bedeviled by
credit problems after her identity was misused.
                                                        Photo by Robert Durell

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.”

Joanne McNabb

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.

Rachel Sanders

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