David White, Global Head of Product & Data at LSEG Risk Intelligence, joins Patricia Wu at Money20/20 Europe in Amsterdam to discuss the critical issue of child identity theft, a topic highlighted at the Money20/20 Europe conference. David emphasized that child identity theft is often perpetrated by someone the child knows, with a staggering 73% of cases involving family members. The statistics are shocking, with one in 50 U.S. children affected, and the average age of a child whose identity is stolen being just eight years old. This means that many victims remain unaware of the crime until they reach adulthood, often facing significant financial repercussions when they apply for loans or credit cards.
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Well, let's head back across the Atlantic for day 3 of Money 2020.
Well, the conference has explored the future of traditional finance with various capital markets groups gathering for this purpose.
And along those lines, the London Stock Exchange Group is on the ground at the event and standing by with a representative from the group.
It's TV's very own Patricia Wu.
Good morning.
Good afternoon to you, Patricia.
Hi there, Remy.
I'm here with David White, global head of product and data for LSEG.
So thanks so much for being here with us.
Tell us about your main objective for being here at the conference.
Well, thanks for having me on.
It's it's great to be here.
Um.
Pretty exciting time for us because we've just launched a white paper and the subject of that white paper is child identity theft.
So we're really here today and over the money 2020 to sort of highlight the problem, talk about the problem as an industry and really hopefully make more awareness around this, right?
And I understand you also have a documentary coming out in July, and we have a little trailer from that.
So let's take a look.
Wonderful.
People tend to think that identity theft is just this random bad person behind the computer.
Identity theft is extremely prominent against unprotected members of society.
Elderly individuals.
Children And this is a crime, the most commonly done by family members.
Because those are the individuals that have access to your information.
Well, what really struck me from that is 1 in 50 US children and also that it's most often committed by a family member.
Yeah, I mean, first of all, the 1 in 50 number is, I mean, it's a shocking statistic in and of itself, but if we're honest, that's probably underreporting.
So I think the scale of the problem, certainly when we started to look into this, and I think it's worth pointing out that Renata, who was in the clip you've just seen, is actually a team member of ours.
When we really started looking into this, the numbers were shocking, and with regards to that family member, I think the stats that we highlighted in there were 73% of these identity thefts is actually committed by somebody the child knows closely, often a family member.
Now that is troubling and even more troubling is that because they're children, they probably don't know for years until they reach adulthood when they're applying for a student loan or a credit card.
So what are the long term implications there?
Yeah, and I think it's a very good point.
I mean, the average age of a child that has their identity stolen is 8 years old.
Now that means that crime often will go undetected for 10 years.
If you can imagine, it's the point at which they start to sort of.
Enter into that adult financial life that suddenly this comes to light for them and I think that can be, you know, one, it's, it's timing wise devastating, you know, you're starting your adult life and suddenly all of this crime comes crashing down on you.
But also just because the criminals have so long to commit these frauds, these frauds are often very complex.
Running up massive debts in Renna's case, $400,000 of debt was run up in her name before she discovered it.
So what can the industry do?
Well, I think from an industry point of view and you know, at LEG we are the risk intelligence division of the London Stock Exchange Group, so we're very much focused on the risk within the system and how to mitigate that.
So we've outlined in the white paper, I think, 8 specific things we think the industry would do, could do.
I think I'd highlight a couple that may actually sound quite obvious, but when we did the investigation, really weren't there at the stands as we'd assumed.
So the first thing is obviously identity verification.
Quite often these frauds are committed by somebody taking the child's name, maybe their Social Security number, but then creating a synthetic identity, so obviously changing the date of birth, adding more details, etc.
So that means ID verification and doing it from a trusted source is absolutely essential to protect these children.
I think a couple of other things we highlighted was age verification.
We were shocked to see how little secondary age verification is done, where again, you're not going to a trusted source to make sure that that name.
Is actually somebody that is an adult rather than not.
And the final one was using multiple sources.
So a good example is if you suddenly get an idea of somebody in their 30s claiming to be, and they have no credit record, that's a big red flag.
It's incredibly unlikely, and it certainly should stop the process and require further investigations.
So there's a number of recommendations in there, some.
There are some maybe we need to work as an industry to do more on, but certainly opportunities to improve the situation.
So we have just about 20 seconds to wrap up.
Where can we find this white paper, and I imagine the number one tip for parents maybe is to safeguard the information and freeze their children's credit.
Absolutely.
You can find it on our website, LSEC.com, but the main thing I would say is as a parent.
Safeguard your children.
Remember this is happening and make sure you safeguard them online.
Thank you so much.
Thank you.