KANSAS CITY, Mo. -- The latest form of identity theft doesn't depend on stealing your Social Security number. Now thieves are targeting your kid's number long before the little one even has a bank account.
Hundreds of online businesses are using computers to find dormant Social Security numbers -- usually those assigned to children who don't use them -- then selling those numbers under another name to help people establish phony credit and run up huge debts they will never pay off.
Authorities say the scheme could pose a new threat to those who have no money of their own: They carry no spending history and offer a chance to open a new, unblemished line of credit. People who buy the numbers can then quickly build their credit rating in a process called "piggybacking," which involves linking to someone else's credit file.
Many of the business selling the numbers promise to raise customers' credit scores to 700 or 800 within six months.
If they default on their payments, and the credit is withdrawn, the same people can simply buy another number and start the process again, causing a steep spiral of debt that could conceivably go on for years before creditors discover the fraud.
Jensen compared the businesses that sell the numbers to drug dealers.
"There's good stuff and bad stuff," she said. "Bad stuff is a dead person's Social Security number. High-quality is buying a number the service has checked to make sure no one else is using it."
Credit bureaus can quickly identify applications that use numbers taken from dead people by consulting the Social Security Administration's death index.
Social Security numbers follow a logical pattern that includes a person's age and where he or she lived when the number was issued. Because the system is somewhat predictable, sellers can make educated guesses and find unused numbers using trial and error.
A "clean" CPN is a number that has been validated as an active Social Security number and is not on file with the credit bureaus. The most likely source of such numbers are children and longtime prison inmates, experts said.
Robert Damosi, an analyst with Javelin Strategy & Research, saidses or phone numbers they've used in the past. They're also told to avoid any other information that connects the new, clean credit profile with the old, damaged one.
Craig Watts, a spokesman for credit reporting agency FICO Inc., said FICO has tools available for businesses to protect themselves from this type of fraud, but they are not cheap. And many lenders are slow to adopt FICO's new formulas, which are updated every few years.
Some companies that sell the numbers have lavish, high-tech websites. Others run no-frills ads on sites like Craigslist.
Jim Buckmaster, president and CEO of the San Francisco-based Craigslist, recently told the AP in an e-mail that there were "fewer than 200" classifieds on his site that used the word "CPN."
Within an hour of that e-mail exchange, dozens of the ads in cities such as Las Vegas, Los Angeles and New York had been pulled from the site. Many were reposted the next day.
An AP reporter called several of the sites, but got only recordings asking callers to leave a message with contact information.
Experts say the fraud will be difficult to stop because it's so easily concealed and targets such vulnerable people. Other than checking with the credit bureaus to see if there is a credit file associated with your child's Social Security number, spokesmen at FICO, the Social Security Administration and the FTC said there are no specific tools for safeguarding the number.
"This is an invisible crime, with invisible victims who don't have enough support out there to help them," said Linda Foley of the ID Theft Resource Center in San Diego.