We already knew that little kids' Social Security numbers were a prime target for identity thieves. But the FBI has recently learned just how sophisticated these bottom-feeders have gotten.
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 the nation's credit system. Because the numbers exist in a legal gray area, federal investigators have not figured out a way to prosecute the people involved.
These people don't claim they're selling SSNs--rather, they call the numbers "CPNs." Depending on the outlet, that stands for "credit profile numbers," "credit protection numbers" or "credit privacy numbers." The bottom-feeders obtain these numbers by scouring for random SSNs. If they aren't being used for credit, the numbers are then sold--often under cover of boosting credit scores. Kids are particularly vulnerable because they usually don't use those numbers for years.
Julia Jensen, an FBI agent in Kansas City, stumbled on this while investigating a mortgage-fraud case. She says that kids' SSNs are considered top of the line for identity thieves.
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.
What makes it even more insidious is that most lenders don't even know the information they're getting may be fraudulent--since it comes from the credit bureaus, most lenders assume it's legit.
The gray area? Even though the businesses know they're selling SSNs and tell their customers to use false information when applying for credit, they discourage customers from using the numbers in place of SSNs.