📋
Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
Los Angeles County Grand Jury
• 2011-2012
Identity Theft of Foster Children
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 3 findings
F1
Page 344
Avoid having to make individual written requests for each child’s credit report by developing a procedure for making an electronic batch request containing the identifying information on all age identified children, and transmitting it via a secure channel to the various CRBs.
F2
Page 344
Remove any records found from the children’s credit reports without incurring significant workload or cost.
F3
Page 344
Protect the children from any further negative impact of fraud after remediation of the records found had been completed. The Pilot Project submitted 2,110 records of 16 year-olds and found a total of 104 records (5% of the pilot project sample) had been corrupted or compromised. The Pilot Project focused on removing the credit records of foster children rather than leading to the prosecution of identity thieves. According to the Pilot Project findings of the 16 year olds studied, the average age of a foster child when the fraudulent account was opened was 14 years old. Of the 104 records that were found to be corrupted, the largest fraudulent loans were: one home loan that was over $200,000, four major loans, and three auto loans. The Pilot Project removed the fraudulent records; however, it did not “suppress” the files of the foster children in the CRB records to prevent further identity theft. Suppression means that the credit record is not available to anyone except the foster child with adequate proof of identification, and a PIN is not required to be given to the various agencies or foster parents. The corrupted records of the identified 16 year olds found in the Pilot Project should have been immediately suppressed to prevent any further degradation of the foster child’s credit. The Identity Theft Project (ITP) was also created to accommodate the juveniles in the Foster Care System who are monitored by the Probation Department; however, this group of juveniles was not included in the Pilot Project. The CGJ noted that Section §10618.6 added to the Welfare and Institutions Code did not address the need to protect foster children on a continuing basis from criminal corruption of their credit reports. The information contained in the foster child’s identification card is necessary for the persons or institutions that care for the foster child. In order to claim appropriate 4 www.privacy.ca.gov/consumers/foster_youth.pdf, and see Exhibit 2. IDENTITY THEFT 2011-2012 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT 311 Federal and State tax deductions and other financial inducements to caretakers of foster children, the SSN has to be provided to those agencies. The CGJ determined that prevention of misuse of the information contained in foster children CRB files was preferable to the correction of these corrupted files by DCA. The CGJ’s goal was to reduce the effort of DCA to a minimum in the future.
Recommendations 6
-
R1Page 364Scalability: Going Statewide The procedures used in the pilot project for ordering credit reports and transmitting the sensitive data electronically among DCFS, the CRAs and the remediation agencies proved both efficient and secure. Based on the pilot project, the work of a foster care agency in creating and transmitting a report of foster children’s identifying information and then transmitting it to the three CRAs on a quarterly basis would amount to less than 100 hours a year plus one-time work at start-up of less than 50 hours. This workload would be the same regardless of the number of records in the report. For each of California’s 58 counties to do the same thing would mean 58 times the workload statewide. The CRAs have said that they could not use the pilot project data transmission procedures for all the counties individually. We also have serious concerns about the security risks of involving so many entities in transmitting such sensitive data. The “manual” alternative of the county agencies sending individual written requests to the credit reporting agencies, providing the necessary documentation for each child, would be far more labor- intensive than making a bulk request electronically. The counties would then have to send the paper credit reports received to the remediation agencies, which would add to the workload and the security risk. The last thing we want to do is to expose foster children IDENTITY THEFT – EXHIBIT 2 2011-2012 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT 331 C a l i f o r n i a O f f i c e o f P r i v a c y P r o t e c t i o n | 15 to identity theft through the process intended to protect them from its consequences. See
-
R2Page 365IV. Recommendations 1. The California law on foster child identity theft focuses on clearing the children’s credit records of fraudulent or erroneous information that could harm them in the future, not on ferreting out identity thieves. Nevertheless, the data received from the credit reporting agencies for the pilot project should be helpful in identifying possible indications of the crime. We recommend that the Los Angeles County Department of Children and Family Services, which received the data at the completion of the pilot project, provide the data to law enforcement to review for indications of identity theft. We also recommend that the Department review the data for any implications for their own internal procedures and make any changes to those procedures indicated by their findings. 2. In expanding the foster child identity theft protection program statewide, California should strive to centralize requests for credit reports rather than make them on county-by-county basis. As discussed above, while the data transmission procedures used in the pilot project proved both efficient and secure, the credit reporting agencies have said they would not use the procedures for California’s 58 counties individually. An alternative would be to centralize the transmission of requests for credit reports at the state level, through the Department of Social Services, which has the data on foster children statewide. Or perhaps, since half the foster children in the state are in Los Angeles County, the County Department of Children and Family Services could continue to perform that task for their county, with the other 57 counties’ data being submitted at the state level. The remediation activities could continue to be performed by the Los Angeles County Department of Consumer Affairs for that county and by the California Office of Privacy Protection for other counties, unless there are county agencies able to take on the remediation work. While the California law would allow for remediation to be performed by non-governmental organizations, we believe that a government agency is more likely to be successful in “certifying” to creditors and collectors the status of the children as minors in foster care. 3. We recommend that the credit reporting agencies explore the possibility of protecting children by offering parents and legal guardians, including foster care agencies, the ability to “suppress” the identities of minor children in the credit IDENTITY THEFT - EXHIBIT 2 332 2011-2012 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT C a l i f o r n i a O f f i c e o f P r i v a c y P r o t e c t i o n | 16 reporting systems. The agencies might also explore developing a secure, automated procedure for requesting the credit records of minors. 4. We recommend that the credit reporting agencies consider how to address the potential for harm to children (and adults) of the agencies’ maintenance and use of records tied to individuals by Social Security numbers only, such as the SSN- only records found in the pilot project. When two or more profiles are reporting information using the same Social Security number, the accuracy of the resulting records would seem to be in question and further disclosure of such inaccurate information can create problems for consumers. 5. We recommend that the credit reporting agencies consider how to limit the potential harm to minors of “authorized user” accounts reported by some data furnishers. The practice of some creditors (data furnishers) of reporting an account in the name of an authorized user may create problems for a minor child. An authorized user is not financially responsible for the obligation and we understand that such an account is not factored into calculations of the authorized user’s credit score, although some of the creditors we spoke with believed that having a credit record as an authorized user helps the child establish a credit rating. The reporting of such accounts can inappropriately create a credit record for a minor and can result in debt collectors pursuing the child. IDENTITY THEFT – EXHIBIT 2 2011-2012 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT 333 C a l i f o r n i a O f f i c e o f P r i v a c y P r o t e c t i o n | 17 Acknowledgements The project that is the subject of this report was truly a team effort. Many participants were involved for over a year, from the first formulation of the plan to the completion of the report. The credit reporting agencies played an important role and I am particularly grateful for the assistance of Laura Mundy, Paul Hernandez and Cathy Jones of Experian, the agency that went first in pulling the credit records of the test population. Their willingness to answer our many questions and help us work through the project’s complicated issues is very much appreciated. I also want to thank Diane Terry and her colleagues at TransUnion and Gary Poch and his at Equifax for their helpfulness. At the Los Angeles County Department of Consumer Affairs, our partners in tackling the task of clearing up the records were Rigoberto Reyes, Dawnnesha Smith, Kirk Shelton and Alejandra Zepeda. Their expertise was invaluable and their camaraderie kept us going on what turned out to be a longer project path than we had originally envisioned. I also want to acknowledge the contributions of the dedicated people who work full time on behalf of foster children: Harvey Kawasaki, Lisa-Marie Kaye, Jason Ly and Rhelda Shabazz at the Los Angeles County Department of Children and Family Services, and Theresa Thurmond at the California Department of Social Services. And finally this task would not have been possible without the devoted project team at the California Office of Privacy Protection. Debra Castanon took on a lead role and resolved the most difficult issues throughout the project. Nicole Lee worked on the project for over a year, arranging meetings, keeping records, and advocating the interests of the children with hundreds of creditors and collectors, with the assistance of Christina Savage. Christina Halle also did important work in ensuring the quality of the data and uncovering its significance. Everyone who worked on this project demonstrated not only skill and dedication, but also great empathy for California’s foster children.
-
R3Page 364To Catch the Thieves At the end of the pilot, the data received from the CRAs and copies of the clearance letters from creditors and collectors were provided to DCFS. We have suggested to DCFS that they add the clearance letters to the files of important documents that foster children receive upon emancipation, for use in the event that they experience problems with their credit records in the future. We have also encouraged DCFS to work with DCA in bringing the data to the attention of local law enforcement for investigation. See
-
R4Page 341The Director of DCA should assume the lead role in correcting the corrupted CRB records of foster children. Corrupted CRB records of foster children should be corrected by a governmental agency such as DCA to prevent the foster child from being exposed to the expense and complexity of dealing with the various commercial agencies that deal with identity theft (see Exhibit 1).
-
R5Page 341The Director of DCA should expand its existing telephone voicemail system to add a menu number for the aged out foster children who are encountering identity theft problems, and other problems unique to aging out of the foster care system.
-
R6Page 341The Director of DCA should solicit, train, and encourage the use of senior citizen volunteers to aid the aging out foster youths in dealing with preventing future identity theft and fraud. Senior citizen DCA volunteers could be used to assist the foster youths by educating and acquainting them with resources such as the proper use of credit and debit cards. IDENTITY THEFT 312 2011-2012 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT