Speaker Sheldon Silver and Consumer Affairs Committee Chair Jeffrey Dinowitz today announced the passage of legislation that that would allow parents and guardians to freeze the credit record of their children in order to prevent child identity theft (A.8955-B, Dinowitz). This measure has become increasingly necessary as a 2011 report by ID Analytics, an identity theft protection firm, noted that an estimated 140,000 minors are at risk of falling victim to identity theft every year.
Currently, New York State law only allows a parent to freeze a child's credit if a credit file already exists in the child's name. More times than not, a file exists because the child has already fallen victim to identity theft. This measure would allow a freeze to be placed without an existing credit report on file for a child, likely avoiding the risk of child identity theft altogether.
"This is a measure that takes proactive steps to protect a child's identity and subsequently, their credit information," Speaker Silver said. "Child identity theft can go on for years without a parent realizing it is occurring and this can have harmful effects on the child's credit history. This can lead to serious problems later in life for children as they apply for student loans, try to find a job or attempt to build their credit. Parents have every right to freeze their children's credit and stop a potentially horrible situation from ever occurring."
"With today's constant stream of data-sharing and the 24-7 use of technology to store personal information, reports of identity theft have soared and children are increasingly becoming a target," Dinowitz said. "Knowing that a child will not be applying for credit cards or taking out loans for many years, criminals see a window of opportunity for credit abuse that can take place for a long time before anyone is made aware of the fraudulent activity. It is more important than ever for parents to have a way to shield their children from the lingering and detrimental effects of child identity theft. This legislation will allow parents to freeze a child's credit report, prevent child identity theft and help New York push back against a rapidly growing problem."
This legislation would require credit reporting agencies to place a credit record freeze on a child's account at the request of parent or guardian. Following the freeze, a consumer reporting agency would be prohibited from releasing the child's credit report or any information included in the report to any third party, with a few minor exceptions as required by law. The credit freeze could be removed at the request of the parent or guardian or by the child once he or she turns 16 years old.
The bill would align New York State law with that of several other states - including Maryland, Wisconsin, Delaware, Illinois, Michigan, Texas and Oregon - that already have statutes requiring credit reporting agencies to allow parents or guardians to freeze their children's credit even when no file exists. States such as Florida, Virginia, Indiana and Pennsylvania all have similar statutes pending.
This legislation is expected to be taken up by the Senate prior to the end of the legislative session.