Utilities Child ID Theft

I'm David Schuster in for Ali Velshi. On target tonight, inheriting debt. It's bad enough when a stranger steals your identity, but what happens when your parents fraudulently use your name to rack up bills? This week we've been shining a bright light on something called the dark web. It is a cyber world where illegal transactions range from drug dealing to human trafficking to selling your credit card and Social Security numbers after they've been stolen by hackers. The dark web is one key reason identity theft and identity fraud remain huge problems in the digital age. Last year, 12.7 million Americans had $16 billion stolen from them because of identity fraud. Identity fraud is defined as any unauthorized use of another person's personal information for illegal financial gain, like someone using your stolen credit card to buy something. The term identity theft is used to describe the crime of obtaining your information. Information illegally, like someone you don't know hacking into a computer database. But not all identity theft or fraud involves strangers. There is something experts call familiar fraud, committed by people the victims know. And last year, 550,000 Americans reported they had their information stolen by people including roommates, neighbors, friends, acquaintances, employees, and family members. Yes, Family members. But we're not just talking about relatives who steal information from adult family members for their own financial gain. In some cases, parents struggling financially end up using the identities of their children to help the family stay afloat. For example, the power company will eventually turn off the electricity after a family fails to pay the electric bill. So the mother or father decides to wipe the slate clean by opening another account in their son or daughter's name. In other words, they're taking a step that the law considers fraud to help keep the lights on or keep the phone working. But not only is this illegal, it can have serious financial implications for the children, because if the bills in the child's name are not paid in full, the child is essentially inheriting debt that will follow him or her into adulthood. That can mean damaged credit scores and years of trouble trying to make things right. Duarte Geraldino has our story.

Joel Miranda was 12 when the lights went out the first time.

I remember a number of times where the electricity went off and, and we called my mom and she said, "Oh, I was supposed to pay the bill today." He grew up here in Cambridge, Massachusetts. For a while, my father was the only person working with 6 children.

Depending on how you see it, what happened to Miranda 2 decades ago was either a crime punishable by years in jail Or a desperate act by his parents to keep the lights on. Maybe both.

I believe my parents didn't know that there was anything wrong with this. My mother would find a way to pay. That could only happen for so long before, you know, it got cut off again and again. And so we then put it in someone else's name.

Put the bill in someone else's name. His parents abandoned their account and actually opened a new account in Joel Miranda's name. He was 12 years old at the time. Did you inherit debt?

I did. I did. Uh, and I knew I was inheriting debt at some point. I was a teenager and, uh, we needed the lights on.

Joel is one of an estimated 400,000 Americans who, as children, had their identities used by adults. By some estimates, nearly a quarter of cases involving identity theft in minors are linked to utility bills and family members.

At times there was an electric bill in my name.

Miranda says his family's bills just kept piling up.

I know that at some points it was in the thousands, and again, out of necessity, right? I mean, I can't stress that enough, and I hope that comes across. Um, and it's done, and it's, and it's done to help the family.

Utility companies, they have the ability to screen new applicants to see if their children or adults, but many just don't.

That's how Keisha Bush's mother did it. She put utility bills in Keisha's name. At the time, Keisha was only 16.

I also thought, well, if we get to start over, like, yeah, the previous bill kind of got out of hand and it kind of, you know, it escaped her, but maybe if we started over fresh, she would be able to keep up, you know. Like sometimes you think maybe the person just needs a reset. Sometimes people think they just need a reset. Like if I can just get rid of the debt that I have now and start over without the burden of it, everything will be fine and things will be better. But that's not the truth. It's not. And then, you know, there was a bit of disappointment because it wasn't just in her name, it was in my name.

The practice is so common that 5 states are taking take a really strong stance against child ID theft. Indiana goes a step further. If in that state you use the identities of your children or dependents to commit fraud, you face a far harsher penalty than if the victim were an unrelated adult. All these laws, however, only address one side of the problem.

Cybersecurity expert Robert Siciliano says it's not worth it to utility companies to pay more for detailed background checks on every new applicant because most monthly bills are rarely more than a few hundred dollars.

There's a cost-risk analysis as to whether or not they want to dig deeper to identify and authenticate whether the social matches up with the age of the actual applicant.

And in the meantime, the person bearing that risk is the child.

The child's always at risk.

Making matters worse, Social Security numbers are a sort of accidental national ID. They were designed to track wages for retirement benefits, not biographical information. Al Jazeera contacted all three major credit rating agencies. Equifax was most direct, writing in part, "The date of birth age is not necessarily part of the credit file. A more in-depth credit report does not exist." Ah, ah, ah. That means a child born right now could have a light or gas bill put in his name within a few weeks. Legally, victims of ID theft don't actually have to pay bills racked up in their name, but many child victims, the people who inherit utility debt, I don't see it that way.

Why didn't you fight it? Why don't you say, "I was too young. Clearly this wasn't me"?

Well, because the name on the bill was me, and it was done to help my family.

Keisha agrees. She also knows how difficult it was to clean up her credit history and shake free from debt which, while in her name, didn't really belong to her.

Nobody's gonna forgive you for that. Not in this world.

I wanna say it took me, um— 5 to 10 years. 5 to 10 years because I was fixing my own debt. I was fixing this debt that was following me. It's a common practice and we don't often talk about it because it's also not something we're very proud of, but it is how we survived.

Survive the pressures of soaring utility bills, shrinking incomes, and the desire for a second chance.

And Duarte Geraldino joins us now in studio. Duarte, the people you spoke to agreed to pay the debt, but could they? Have tried to fight the bills?

They could, and actually some people do fight the bills. There are actually mechanisms in place for you to do this, but they say they didn't want to get their parents in trouble, that if they did this, it would eventually lead back to their families. And remember, they say their parents weren't abusive, they were trying to help the children. Now, it's important to note that in most cases where a parent fraudulently uses a child's ID for utility bills, the parents are actually making payments. Their, their goal is not to have the bills shut off a second or third time. But in Keisha and Joel's case, it happened that way.

Did you talk to the utility companies and what did they say about all of this?

None of the utility companies would speak to us on the record. Many say, "You know what, we are just operating the way we operate. There's been a lot of expansion in our industry." Right now, the utilities are in a very difficult situation because the energy landscape has changed so much and it's so competitive. So they want to do everything possible to keep customers. And this is one way.

But why aren't the utility companies being held accountable for some of this?

Well, in Massachusetts, we contacted the Attorney General's office, and the AG's office says there's actually no law on the books requiring companies to verify the adulthood of new applicants. That's a sort of a gray area. Once again, Massachusetts, like in many states, they're deregulated, so they want to make sure that companies have every advantage to actually survive. For the company's point, they say, well, you know, it costs us a little bit more to run a deeper credit check, and most people, most bills are actually paid on time.

And never mind the states, are federal lawmakers getting involved in this?

They are. In fact, Emerald Cities, which is a group that advocates for energy equality and environmental justice, they actually held some briefings with congressional aides to let them know how big this problem is and how many people are being pushed to the edge. I mean, right now we live in a world where The energy landscape is changing so quickly, it's actually deepening the divide between the haves and have-nots. For Joel's case, he says, you know, his family was poor. And so when you're poor like that, you do what you need to do to survive. And a lot of times that means that the children of these people who are poor grow up with an added weight, added debt that most people don't. Mm.

Duarte Geraldino. Duarte, thanks for the report.

We appreciate it.