Why parents may want to start locking a child’s credit at a very young age

Published

5 months ago

August 23, 2024

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Most parents would take herculean steps to protect their children. But many overlook a relatively simple way to help shore up a child’s financial security: freezing the minor’s credit.

This could be especially important in the wake of a major breach in which the Social Security numbers of myriad Americans might be for sale on the dark web. While locking their credit won’t solve all cybersecurity issues related to stolen Social Security numbers, it’s one extra layer of protection parents can implement.

The credit-locking process involves contacting each of the three major credit bureaus — Experian, Equifax and TransUnion — and providing required documentation including the child’s birth certificate, Social Security card, proof of address and parent identification. The bureau then creates a credit report for the child and then locks it, so loans or credit cards can’t be issued using the child’s personal information. The freeze remains in place until the parent, or in some cases, the child, requests that it be lifted, temporarily or permanently.

Parents can take these steps proactively even if there’s nothing to suggest a minor’s credit has been compromised such as unexpected credit card solicitations or bills received in the minor’s name.

It can take some time and effort to lock a child’s credit, but the outlay is minimal compared with what can be a lengthy and emotional credit restoration process. “As an adult, if our credit is stolen, it makes us angry, but we do what needs to be done and we move forward,” said Kim Cole, community engagement manager at Navicore Solutions, nonprofit credit and housing counseling agency. But for children, the emotional impact is much greater, she said. “It can take years to get wind of a problem, and meanwhile the damage can continue to grow.”

Identity theft against children — especially very young ones — often slips under the radar until they are older teens or young adults applying for their first credit card, trying to finance a car or seeking student loans, said Loretta Roney, president and chief executive of InCharge Debt Solutions, a nonprofit provider of credit counseling and other services.

Yet, identity theft for children under age 19 is a growing issue, with this demographic accounting for 3% of all identity theft reports for the first half of 2024, according to Federal Trade Commission data. By comparison, this demographic accounted for 2% of identity fraud reports each year between 2021 and 2023.

Thieves might use a child’s Social Security number, name and address, or date of birth to do things like apply for government benefits, like health care coverage or nutrition assistance, open a bank or credit card account, apply for a loan, sign up for a utility service or rent a place to live, according to the FTC. Locking a child’s credit won’t protect against all of these, but it’s a solid step in the right direction, financial professionals said.

It’s not just strangers committing fraud against children. Cole offers the example of a friend whose uncle had destroyed his credit and started using his niece’s name and Social Security number to open credit cards and max them out. He had the bills sent to his house, and the young woman only discovered the fraud about four years later, when she went to buy a small fixer-upper and realized she had nearly $50,000 of debt in her name and a credit score in the low 500s.

The niece filed a police report, a complaint with the FTC and disputed the items with the credit bureaus, but it took time to resolve. She applied for a secured credit card in the interim, since her score was too low to qualify for a traditional card, and the situation pushed back her home-buying by a few years, ultimately costing her more, Cole said.

Check to see if the child has a credit report

Before locking a child’s credit, it’s good practice to check with each of the three major credit bureaus to see if a report exists. Generally, this will only be the case if someone has fraudulently taken out credit in the minor’s name, or if the child has been named an authorized user on an adult’s credit card.

To check to see if their child has a credit report, parents can mail a letter with their request to each of the credit bureaus. They should be sure to include a copy of the child’s birth certificate, Social Security card or document from the Social Security Administration showing this number and a copy of the parent’s driver’s license or government-issued identification, with current address. Legal guardians may have to give the credit bureaus a copy of documents authenticating their status.

If something amiss pops up on the report, contact the companies where the fraud occurred as well as the three major credit bureaus. Also report the child identity theft to the FTC, including as many details as possible.

If the report comes back clean, the next step is to actually lock the child’s credit.

If needed, freeze a child’s credit

The process for initiating a credit freeze varies slightly depending on the credit bureau and the age of the minor child. Be sure to follow the precise instructions for each credit bureau. For Equifax, in addition to required documentation, parents need to fill out a form online and submit it via postal mail; minors who are 16 or 17 may request their own security freeze by phone or by mail. The websites for Experian and TransUnion provide further details on their respective processes, which includes document requirements and mailing addresses. It can take a few weeks for the bureaus to process these requests.

Keep good records for unlocking later in life

Parents need to keep safe the pin number they are provided when locking their child’s credit so it can be temporarily unlocked as needed, such as when the child turns 18 and wants to apply for a credit card, said Bruce McClary, senior vice president of membership and media relations at the nonprofit National Foundation for Credit Counseling.

The unlocking process isn’t necessarily seamless and can take time. Equifax, for instance, asks for these requests in writing, with required documentation for identity verification purposes. After age 18, Equifax allows for managing the security freeze online.

Educate children early on protection of personal information

Parents should talk to their children about best practices with respect to sharing personal information, McClary said. For instance, they should caution children to be careful about the kinds of information they provide to websites and apps and to keep their Social Security number close to the vest.

Parents may also want to consider credit or identity threat monitoring services or both. Certain providers may offer basic services for free, but family plans that include adults and children and offer a combination of credit and identity theft protection tend to be fee-based. These services — which can run around $24 or more per month — may offer more comprehensive protection, including identity theft insurance and fraud resolution services. Parents should weigh the options carefully to understand the choices and associated costs.

Technology

Tesla is offering Cybertruck discounts as EV market gets crowded

Published

5 hours ago

January 16, 2025

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Tesla is offering Cybertruck discounts as EV market gets crowded

A soldier walks next to a Tesla Cybertruck, which was donated to the National Guard, after powerful winds fueling devastating wildfires in the Los Angeles area forced people to evacuate, in the Pacific Palisades neighborhood on the west side of Los Angeles, California, U.S. Jan. 13, 2025.

Daniel Cole | Reuters

Tesla started offering discounts on new Cybertruck vehicles in its inventory this week, according to listings on the company’s website.

Discounts are as high as $1,600 off new Cybertrucks, with the reduced price depending on configuration, and up to around $2,600 for demo versions of the trucks in inventory, the listings show. Production of the angular, unpainted steel pickups has reportedly slowed in recent weeks at Tesla’s factory in Austin, Texas.

Deliveries of the unconventional pickup began reaching customers in 2023. CEO Elon Musk originally unveiled the Cybertruck in 2019 and said it would cost around $40,000, but its base price in the U.S. was closer to $80,000 over the course of 2024.

Wall Street previously viewed the Cybertruck as an important driver of growth for Tesla’s core automotive sales.

While the Cybertruck outsold the Ford Lightning F-150 last year in the U.S. and became the fifth best-selling EV domestically, according to data tracked by Cox Automotive, its high price, repeat recalls and production issues in Austin hampered growth. In November, Tesla initiated its sixth recall in a year to replace defective drive inverters.

As CNBC previously reported, Tesla’s deliveries declined slightly year-over-year in 2024, even as EV demand worldwide reached a record. A slew of new competitive models from a wide range of automakers eroded Tesla’s market share.

According to Cox data, full-year EV sales reached an estimated 1.3 million in 2024 in the U.S., an increase of 7.3% from the prior year. But Tesla’s sales for the year declined by about 37,000 vehicles.

The Tesla Model Y SUV and Model 3 sedan ranked as the top two best-selling EVs by a wide margin. But both older, more affordable Tesla models saw sales drop from the previous year. Cox estimated Tesla sold around 38,965 Cybertrucks in the U.S. last year.

In recent days, Musk apologized to customers in California for delays in delivering their Cybertrucks. He said the trucks are now being used to bring supplies and wireless internet service to people in Los Angeles impacted by devastating wildfires.

“Apologies to those expecting Cybertruck deliveries in California over the next few days,” Musk wrote on X. “We need to use those trucks as mobile base stations to provide power to Starlink Internet terminals in areas of LA without connectivity. A new truck will be delivered end of week.”

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Technology

Goldman Sachs CEO Solomon says IPO market is ‘going to pick up’ along with dealmaking

Published

5 hours ago

January 16, 2025

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Goldman Sachs CEO Solomon says IPO market is 'going to pick up' along with dealmaking

David Solomon, CEO of Goldman Sachs, speaks during the Reuters NEXT conference, in New York City, U.S., December 10, 2024.

Mike Segar | Reuters

Goldman Sachs CEO David Solomon says there’s an end in sight to the multi-year IPO drought.

“It’s going to pick up,” Solomon said on Wednesday, in an on-stage interview with Cisco CEO Chuck Robbins at a summit hosted by the computer networking company in Silicon Valley. “It’s been slow, it’s been turned off.”

Solomon, who flew to California for the event just after his Wall Street bank reported fourth-quarter results that blew past analysts’ estimates, said the capital markets broadly are showing signs of life ahead of President-elect Donald Trump’s inauguration next week.

The tech IPO market has largely been dormant since the end of 2021, when tech stocks started falling out of favor due to soaring inflation and rising interest rates. Mergers and acquisitions have been difficult in technology because of hefty regulation that’s restricted the ability for the biggest companies to grow through dealmaking.

Solomon said the mood is changing, and he expects momentum M&A as well as in IPOs.

“We have a more constructive kind of optimism, which always helps,” Solomon said. He later added that, “broadly speaking, I think it’s an improved business environment.”

Earlier in the day, Solomon said on his company’s earnings call that Trump’s election and a swing back to Republican power in Washington is already starting to make an impact in the business world. He noted on the call that “there is a significant backlog from sponsors and an overall increased appetite for dealmaking supported by an improved regulatory backdrop.”

Solomon’s comments on the call and at the Cisco event came on a day when the S&P 500 posted his biggest gain since November, helped by a tame inflation report and Goldman’s results. Goldman’s stock popped 6% on Wednesday.

While the stock market has had a strong two-year run and the S&P 500 and Nasdaq hit fresh records last month, IPOs have yet to see a resurgence. Cloud software vendor ServiceTitan debuted on the Nasdaq in December, marking the first significant venture-backed IPO in the U.S. since Rubrik in April.

“The values came down after 2021, people are growing back into those values,” Solomon said at the Cisco summit.

Some companies have said they’re ready. Chipmaker Cerebras filed to go public in September, but the process was slowed down due to a review by the Treasury Department’s Committee on Foreign Investment in the U.S., or CFIUS. In November, online lender Klarna said it had confidentially filed IPO paperwork with the SEC.

Though he’s bullish about what’s coming, Solomon said that there are structural reasons not to go public. He said 25 years ago there were roughly 13,000 public companies in the U.S., and today that number has come down to 3,800. There are higher standards around disclosure for being public, and there’s now tons of private capital available “at scale.”

“It’s not fun being a public company,” Solomon acknowledged. “Who would want to be a public company?”

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Technology

How VPNs might allow Americans to continue using TikTok

Published

8 hours ago

January 15, 2025

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How VPNs might allow Americans to continue using TikTok

Dado Ruvic | Reuters

If TikTok does indeed go dark on Sunday for Americans, there may be a tool for them to continue accessing the popular social app: VPNs.

The Chinese-owned app is set to be removed from mobile app stores and the web for U.S. users on Sunday as a result of a law signed by President Joe Biden in April 2024 requiring that the app be sold to a qualified buyer before the deadline.

Barring a last-minute sale or reprieve from the Supreme Court, the app will almost certainly vanish from the app stores for iPhones and Android phones. It won’t be removed from people’s phones, but the app could stop working.

TikTok plans to shut its service for Americans on Sunday, meaning that even those who already have the app downloaded won’t be able to continue using it, according to reports this week from Reuters and The Information. Apple and Google didn’t comment on their plans for taking down the apps from their app stores on Sunday.

“Basically, an app or a website can check where users came from,” said Justas Palekas, a head of product at IProyal.com, a proxy service. “Based on that, then they can impose restrictions based on their location.”

Masking your physical internet access point

That may stop most users, but for the particularly driven Americans, using VPNs might allow them to continue using the app.

VPNs and a related business-to-business technology called proxies work by tunneling a user’s internet traffic through a server in another country, making it look like they are accessing the internet from a location different than the one they are physically in.

This works because every time a computer connects to the internet, it is identified through an IP number, which is a 12-digit number that is different for every single computer. The first six digits of the number identifies the network, which also includes information about the physical region the request came from.

In China, people have used VPNs for years to get around the country’s firewall, which blocks U.S. websites such as Google and Facebook. VPNs saw big spikes in traffic when India banned TikTok in 2020, and people often use VPNs to watch sporting events from countries where official broadcasts aren’t available.

As of 2022, the VPN market was worth nearly $38 billion, according to the VPN Trust Initiative, a lobbying group.

“We consistently see significant spikes in VPN demand when access to online platforms is restricted, and this situation is no different,” said Lauren Hendry Parsons, privacy advocate at ExpressVPN, a VPN provider that costs $5 per month to use.

“We’re not here to endorse TikTok, but the looming U.S. ban highlights why VPNs matter— millions rely on them for secure, private, and unrestricted access to the internet,” ProtonVPN posted on social media earlier this week. ProtonVPN offers its service for $10 a month.

The price of VPNs

Both ExpressVPN and ProtonVPN allow users to set their internet-access location.

Most VPN services charge a monthly fee to pay for their servers and traffic, but some use a business model where they collect user data or traffic trends, such as when Meta offered a free VPN so it could keep an eye on which competitors’ apps were growing quickly.

A key tradeoff for those who use VPN is speed due to requests having to flow through a middleman computer to mask a users’ physical location.

And although VPNs have worked in the past when governments have banned apps, that doesn’t ensure that VPNs will work if TikTok goes dark. It won’t be clear if ExpressVPN would be able to access TikTok until after the ban takes place, Parsons told CNBC in an email. It’s also possible that TikTok may be able to determine Americans who try to use VPNs to access the app.

(L-R) Sarah Baus of Charleston, S.C., holds a sign that reads “Keep TikTok” as she and other content creators Sallye Miley of Jackson, Mississippi, and Callie Goodwin of Columbia, S.C., stand outside the U.S. Supreme Court Building as the court hears oral arguments on whether to overturn or delay a law that could lead to a ban of TikTok in the U.S., on January 10, 2025 in Washington, DC.

Andrew Harnik | Getty Images

VPNs and proxies to evade regional restrictions have been part of the internet’s landscape for decades, but their use is increasing as governments seek to ban certain services or apps.

Apps are removed by government request all the time. Nearly 1500 apps were removed in regions due to government takedown demands in 2023, according to Apple, with over 1,000 of them in China. Most of them are fringe apps that break laws such as those against gambling, or Chinese video game rules, but increasingly, countries are banning apps for national security or economic development reasons.

Now, the U.S. is poised to ban one of the most popular apps in the country — with 115 million users, it was the second most downloaded app of 2024 across both iOS and Android, according to an estimate provided to CNBC from Sensor Tower, a market intelligence firm.

“As we witness increasing attempts to fragment and censor the internet, the role of VPNs in upholding internet freedom is becoming increasingly critical,” Parsons said.

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