Sometime on October 14, a wide array of furniture and electronics were stolen from a commercial storage facility outside Phoenix. The building was used by the Arizona Early Intervention Program, which helps families of disabled children.

Two weeks ago, the state informed the parents of the nearly 40,000 children in the program that their personal information was potentially at risk for ID fraud. According to the Arizona Department of Economic Security (DES), a backup computer hard drive stolen from the facility was password protected. What happened next is where the controversy arises.

The DES and others in the media suggested that parents concerned about protecting their children against ID fraud seek a credit report for each child, and then put a credit freeze on the credit bureau accounts--advice that initially sounded right to me. But sources tell CNET News that such steps are wrong. Jay and Linda Foley, of the Identity Theft Resource Center (ITRC), said ordering a credit report that technically should not exist is one of the worst things you can do.

Making the problem worse
Julie Fergerson, vice president of emerging technologies at Debix, agreed. "If you actually try to order the credit file, there is a certain number of inquires against the Social Security number that the credit bureaus will create, potentially, on accident, a credit file."

Scott Mitic, CEO of TrustedID said, "according to the Federal Trade Commission, as many as 400,000 children may already be victims of identity theft. To make matters worse, the number of complaints has increased by 78 percent over the past several years, making children the fastest growing segment of identity theft victims." He said common warning signs include the receipt of pre-approved credit offers addressed to your child, calls from a collection agency in which the caller asks for your child by name, or notices addressed to your child from government or law enforcement agencies.

Scott Mitic, CEO of TrustedID

(Credit: TrustedID)

Tom Rusin, president and chief executive officer of Affinion's North America operation, said there should be no credit information being stored for minors with the credit bureaus, but they aren't consistent with what age they start to hold a child's information. "For some they hold information for those 18 and older, with one it's 16 and older. Technically speaking, if you are nine, your information should not reside within the credit bureaus at all."

When is too early?
Children today can get a Social Security number assigned within days of birth. That number may be valuable for setting up college saving accounts and obtaining company health benefits, but, in most cases, that Social Security number sits dormant for about 16 years. No loans. No credit cards. No activity. Pat Dane, chief revenue officer at MyPublicInfo, recommends "as soon as the parents give the kid a Social, they ought to start monitoring it."

"It's a squishy area," said Affinion's Rusin. "If they don't have credit files, how can you monitor them?"

So what kind of monitoring is right for a child?

Julie Fergerson, Debix VP of emerging technologies

(Credit: Debix)

Not traditional credit report monitoring, warned ITRC's Jay Foley. He said it's not a good idea to sign up a child for a service for something that does not exist.

Debix's Fergerson told me when ID theft occurs among children, a credit file is often attached to the child's Social Security number with the suspect's name and date of birth, not the child's. "So doing the traditional things like ordering fraud alerts or credit reports, any of those things, will always come back saying there is nothing there."

Mike Prusinski, VP of public affairs at LifeLock, agreed: "A credit freeze cannot be placed if there is nothing to attach it to. After multiple attempts or inquiries (in)to a child's identity, it is possible that a credit file might be created."

"And if there is a credit report file (associated with your child's name), it's not always necessarily identity theft said ITRC's Linda Foley. "It could be that someone mixed up the numbers and instead of a six they put down a five. And sometimes credit files are created because of clerical errors," said Foley. "The key here is to identify it early so we can fix it."