Identity theft can affect families in many negative ways, regardless if only one family member has been directly targeted by thieves. If a parent has become a victim of identity theft, it will be harder for them to obtain mortgages or loans for their family. Similarly, if a teen also becomes a victim, they might not be able to apply for financial aid or student loans until all unauthorized debt has been retracted. The costs of identity theft are not only financial – families can suffer deep psychological trauma as well, including stress and depression.
Ways that identity theft can negatively affect families
Loans
When a family member, who supports their family financially, becomes a victim of identity theft, the results can be devastating for their entire family. That family member may be unable to obtain vital loans or lines of credit. If a thief is specifically abusing their credit cards, then that person and their family will also be adversely affected by low credit ratings. This means that they might not qualify for certain jobs, home loans or car leases.
Repossession
When a family member has become a victim of identity theft, it might be difficult to prove to other parties, such as financial institutions and government agencies, that they are not responsible for the unauthorized purchases. If a family member is unable to pay for their bills as a result of identity theft, then repossession can occur with their cars, houses, boats, and any other items that cannot be paid for.
Stress
Identity theft’s effects can place tremendous amounts of stress and burden on families. Namely financial struggles can cause stress within the family bond, and can lead to divorce or domestic abuse. As a result, any children involved are also psychologically affected in negative ways. Their schoolwork and self-esteem can plummet.
Teenage identity theft
Teens, as members of a family, are also susceptible to identity theft. Thieves may have stolen teens’ identities during childhood, and the teens do not discover its damaging effects until they turn 18. Many teen victims of identity theft find out about it when they apply for college, and fill out financial aid applications. Teenage college applicants will be denied financial aid, including student loans and federal Pell grants, if it is discovered that they are deep in debt. Once the discovery has been made, it takes teens years to repair a credit history that is established based on identity theft. Until their credit is restored, teens will be unable to buy a car, rent an apartment or find employment.
How to safeguard against identity theft
Families can safeguard against identity theft by staying alert and following these tips:
- Families should educate themselves about what identity theft is, how it occurs, and what can happen as a result of it. The federal government offers consumers great educational tools about the dangers of identity theft. Common methods that identity thieves use to obtain personal information include dumpster diving, stealing mail, completing a change of address forms, steal purses or wallets and posing fraudulently as a business.
- All family members should obtain their credit scores from Experian, Equifax, and TransUnion regularly, and they should also monitor their financial statements. Children’s credit scores should also be monitored. Families can obtain this information by writing to each of the three major credit bureaus.
- All pre-approved credit card offers should be shredded along with other confidential documents before tossing them out.
- Families should also consider investing in an identity theft protection agency. Companies, such as LifeLock and TrustedID, offer protection for the whole family, including children and teens.
- If any suspicious activity has been found, it should be reported immediately to the three credit bureaus, the Federal Trade Commission, local police, and to all other interested parties, such as banks and credit card companies.
Summary
Identity theft does not only affect individuals, but it also affects families, and its effects can be widespread. If a family member has become a victim of identity theft, they might not be able to obtain necessary loans, lines of credit and mortgages to support their family. Teens can also fall victim to identity theft, which could ruin their chances of attending college or gaining employment once they turn 18. It is important for every family member to understand identity theft’s risks, and to safeguard against them by staying aware and acting fast.