The New York State Senate today gave final legislative passage to a bill that protects children from identity thieves who steal information to establish fraudulent financial accounts. The bill (S6682B), sponsored by Senator Lee Zeldin (R-C-I, Shirley), helps stop identity thieves from victimizing children by requiring credit agencies to place a credit record freeze on the account of a minor when requested by a parent or guardian.
Senator Zeldin said, “Identity thieves act indiscriminately and can ruin the credit history of children as well as adults. This bill empowers parents by giving them ability to do something before thieves have a chance to begin their fraudulent behavior by preventing credit agencies from opening unauthorized accounts that could significantly impact a child’s financial future.”
Millions of Americans are victims of identity theft each year. These criminals can even target children – using a minor’s Social Security number to apply for government benefits, open bank and credit card accounts, apply for a loan or utility service, or rent a place to live.
Stealing the identity of a child is a particularly egregious problem because it may go undetected for years, until the child applies for student loans, other forms of credit, or even a job. Identify theft involving children is particularly detrimental because it can postpone college admission due to student loan denials, prevent employment or the ability to access credit, and impact the renting or purchasing of a home. Delays can last for months or even years until the child can dispute the fraudulent activity and have the activity cleared from their credit report.
Parents are urged to check their children's credit reports to see if their personal information is being misused, and to take immediate action if it is. However, no mechanism currently exists for parents of children in New York State to take proactive measures to protect their children's credit. Current law allows a parent to freeze the credit of a child only after a file already exists in the child's name. Often this file exists because the child has already been the victim of identity theft.
The bill passed today gives parents a way to proactively protect their children's credit records. Credit reporting agencies would be required to place a credit record freeze on the account of a minor when requested by a protected minor's representative who can provide sufficient proof of identification and sufficient proof of authority to act on behalf of the child.
Under the bill’s provisions, if the credit record of a minor is frozen, a consumer reporting agency would be prohibited from releasing the minor's report, or any information derived there from, to any third party, except in limited circumstances as required by law. The security freeze could eventually be removed.
This bill would bring New York state law in line with state laws in Maryland, Delaware, Michigan, Wisconsin, Illinois, Texas and Oregon, which require credit reporting agencies to allow a parent to freeze their child's credit even when no file exists, thereby averting the potential for identity theft to occur in the first place.
The bill previously passed the Assembly and will be sent to the Governor for consideration.