Starting Friday, Oregon parents and legal guardians can safeguard their children's credit history from identity thieves by placing a "security freeze" on their credit files.
Oregon adults have been able to do this since 2007 through the Oregon Consumer Identity Protection Theft Act, a law the Oregon Department of Consumer and Business Services administers.
A security freeze prevents anyone who has fraudulently obtained a person's personal identifying information from opening a new account or borrowing money using that information.
Placing the freeze is a two-step process: the parent or guardian creates a protected record for the minor child through the three major credit reporting agencies - Equifax, Experian, and TransUnion - and then places the security freeze on that record. There is no charge to create the protected record. However, each credit reporting agency requires a $10 fee to freeze the record.
The freeze continues until the child turns 18. At that time, the child can delete the protected record. Although the record cannot be used as the basis for a credit decision, it can be used for certain background checks such as screening an applicant for employment or renting an apartment.
"It's unfortunate that children can be identity theft victims and have their credit seriously affected or ruined at such a young age," said Patrick Allen, director of the Department of Consumer and Business Services. "This new tool will give peace of mind to parents."
Identity thieves target minors because their credit histories are pristine and they are unlikely to check their credit files. A 2012 study by Javelin Strategy and Research showed that one in 40 U.S. households with children under the age of 18 experienced child identity theft. Sometimes it is the parents or other family members who commit the theft.
The 2013 Legislature pursued the issue, in part based on a security breach involving the Eugene School District. The 2011 breach compromised thousands of student records, including Social Security numbers. A subsequent investigation by the district and Eugene Police Department determined the records were not exposed beyond a few district employees and no records were used for illegal purposes.
"I am pleased that the legislature has provided Oregon families with this important tool to fight identity theft," said Sen. Floyd Prozanski of Eugene. "It will help keep our children's credit ratings safe."
For more information about the protected record and security freezes for both children and adults, click on "How to obtain a security freeze" at the Division of Finance and Corporate Securities website, http://www.dfcs.oregon.gov/id_theft.html.