One of the best things about being young is being relatively carefree — financial stress and burdens shouldn’t bog down most teenagers today. However, the digital age has brought increased dangers for kids, including identity fraud and theft. In 2012, one in 40 families with children under the age of 18 had at least one child whose personal information was compromised. Many financial experts state that this number is on the rise.
Teens and kids can make easy targets for identity thieves. Because parents don’t think to check their child’s credit scores and children may not know how to identify scams, thieves can often get away with opening false accounts and credit cards in children’s names.
Want to keep your child safe from financial scams? Janice Evans, SVP Operational Risk Manager at Origin Bank, has five tips for you and your family.
1. Check your child’s credit score regularly. Even if your child doesn’t have a credit card or any loans, it’s a good idea to check his or her credit score with the credit bureaus — because there may be fraudulent activity. Identity thieves may take out loans or credit-related products using a child’s social security number, because a child doesn’t have any credit blemishes and fraudulent activity can go undetected for years.
“I would recommend that parents start checking credit scores by the time the child turns 16. At that point, you probably still have a couple of years to dispute and resolve any issues before the child applies for a loan or makes a major purchase.” – Janice
2. Give your child a pre-paid debit card. Pre-paid debit cards like Origin’s family debit card allow teens and kids to experience the independence of making their own purchases — without the risks associated with carrying cash or using a traditional credit card. A family card is accepted anywhere the Visa logo is displayed. Give your child a pre-paid debit card to teach budgeting and enjoy peace of mind knowing you can monitor spending. If the card is lost or stolen it can be quickly cancelled.
3. Identify secure apps together. Many teens have started using their smartphones to make payments to each other and split purchases with their friends, as well as make direct payments for goods and services like food and clothes. As the number of apps increases, make sure that you and your child take time to discuss and review apps together — so that you can identify which apps are safe to use and which are not.
4. Go over best practices for online purchases. The growth of financial mobile apps is accompanied by growth in online shopping. In a recent study, teens reported that Amazon was their favorite retailer, and 49% reported that they download or stream (instead of purchase) movie rentals. Given the surging amount of online purchases made by kids, it’s important to educate your child on topics like account protection and password security.
5. Encourage safe savings. Children of all ages benefit from learning to save smart. Many parents encourage children to start saving at a young age. As your child gets older, teach him or her about different savings strategies and stress the importance of choosing a safe, secure savings method.