Protect Your Child from Financial Scams: 5 Tips for Parents
One of the best things about being young is being relatively carefree — especially when it comes to financial stress. But in the digital age, kids are at an increased risk of identity fraud and theft.Because most parents don’t think to check their child’s credit scores and children themselves may not know how to identify scams, thieves often get away with opening false accounts and credit cards in their names. This can make teens and kids easy targets for identity theft.
In 2022 alone, nearly 1.7 million kids were victims of data breaches, exposing or compromising their personal information.
Want to keep your child safe from financial scams? Origin Bank’s team of trusted advisors has five tips for you and your family.
1. Check your child’s credit score regularly. Even if your child doesn’t have a credit card or loans, it’s a good idea to check his or her credit score with the credit bureaus to spot fraudulent activity. Identity thieves sometimes take out loans or credit-related products using a child’s social security number because a child doesn’t have any credit blemishes. Left unmonitored, this fraudulent activity can go undetected for years.
Origin recommends that parents start checking kids’ credit scores regularly by the time they turn 16. At that point, you still have a couple years to dispute and resolve any issues before the child applies for a loan or makes a major purchase.
2. Give your child a prepaid debit card. Prepaid debit cards allow teens and kids to experience independence in making purchases without the risks associated with carrying cash or using a traditional credit card. A prepaid debit card can teach budgeting and provide peace of mind, knowing you can monitor spending. If the card is lost or stolen, you can quickly cancel it.
3. Identify secure apps together. Many teens use their smartphones to make payments to each other, split purchases with friends, and make direct payments for goods and services like food and clothes. As the number of payment apps increases, make sure you and your child take time to discuss and review apps together to identify which are safe to use and which are not. Also make sure to teach them how to identify scams on peer-to-peer payment platforms like Venmo and Cash App.
4. Go over best practices for online purchases. From Amazon to TikTok Shop, the growth of financial mobile apps is accompanied by an increase in online shopping. According to the Federal Trade Commission, the majority of teen-targeted scams are related to online shopping and phony online businesses. And given the surge in online purchases by kids, it’s important to educate your child on topics like account protection and password security. Additionally, teach them how to vet online sellers and detect phishing scams via email, text, or DM.
5. Encourage safe savings. Children of all ages benefit from learning to save smart, and many parents encourage children to start saving early. As your kids get older, educate them on different savings strategies and emphasize the importance of choosing a safe, secure savings method.
Be proactive about your child’s financial security by implementing these five practices. Together, we can protect them from financial scams and lay the foundation for a safe financial future.