The Child Credit Protection Act, which was signed into law in December, lets parents create and freeze credit records for their children. The accounts remain frozen until the child turns 16, although parents can unfreeze them earlier if they choose.
State officials don't track child identity theft and aren't sure how widespread the problem is in Wisconsin. Still, enough parents have asked how to keep their kids' identities safe that it made sense for the Legislature to act, said Sandy Chalmers, who runs Wisconsin's consumer protection division.
"The problem was, children didn't have the same credit protections that adults had. Criminals know those gaps exist so they were able to exploit them," Chalmers said. "This law fills in those gaps."
Here's how it works. Parents can now contact the three major credit-reporting agencies - Equifax, Experian and TransUnion - and have them create and then freeze credit accounts in their children's names. The action prevents someone from creating a fraudulent account using the child's Social Security number.
If someone has already created a fake account, the action will alert parents and give them a chance to fix the damage.
Wisconsin's law, which is among the first of its kind in the nation, also allows guardians to freeze the credit accounts of vulnerable adults, such as elderly relatives with dementia.
Eva Velasquez, who runs the Identity Theft Resource Center in San Diego, Calif., said fewer than 10 percent of cases reported to the nonprofit group involve child victims. But with identity theft becoming more common, she said more cases are likely to be reported as children turn 18, apply for credit for the first time and are rejected when a bad credit history pops up in their name.
There are several ways an identity thief might obtain Social Security numbers. Some might be hacked from school or government accounts. Others might come up by coincidence when workers who enter the country illegally make up Social Security numbers.
Velasquez praised Wisconsin's efforts to get tough on those who would steal children's identities. But she prefers how Utah handled the issue.
Rather than have credit agencies create and then freeze accounts, Utah developed a partnership under which TransUnion agreed to add each minor's Social Security number to a fraud-alert database. The company uses the database to alert creditors when it receives requests for reports associated with those numbers.
Because no credit account has been created for a child, families are further protected from any type of breach, Velasquez said.
Social Security numbers remain in Utah's database until children turn 17, said Scott Morrill, who manages the child identity-protection program for Utah's attorney general's office. He said his office hopes to add the two other credit services to the program in the future.
Wisconsin residents must provide proof that they are a child's parent or guardian and pay $10 per credit bureau to have accounts created and locked.
Chalmers said parents also can protect their children from identity theft by:
- Challenging any request for the child's Social Security number.
- Ensuring children understand the importance of keeping their Social Security numbers private, including when setting up online accounts for social media or other services.
- Shredding documents or letters containing children's personal information before disposing of the paper.