Child Fraud Is on the Rise: How to Protect Your Kids

9 min Read

Children make easy targets for identity theft and other types of cybercrime. A security expert and author of a kids’ book on fraud walks us through ways to keep children safe.

Over the years I have written several articles on scammers targeting the elderly population. It is clearly one of the most despicable crimes to take advantage of those so vulnerable. I have also covered the various scams and how to protect yourself. But I have not talked about another vulnerable group of people: children. I was stunned to learn about the rise in fraud committed against young kids, but happy to hear there were things we could do to protect them.

I connected with Vanita Pandey, the co-author of a new children’s book, “ABCs of Fraud,” written to teach children how to stay safe from online fraudsters and scammers. Pandey is chief marketing officer and head of strategy at Arkose Labs, a global fraud deterrence and account security company whose mission is to create an online environment where all consumers are protected from malicious activity. Here are some ways parents can help keep their kids safe.

Q: What is child fraud and why is it a growing problem?

Vanita Pandey: More and more it is possible for children at younger and younger ages to be the target of online fraudsters. Due to the pandemic, children are interacting on devices for entertainment, school, or socialization. And to be active on these platforms, children oftentimes must have their own accounts created by their parents but that children can access on their own. This trend puts them in the way, and sometimes inadvertently, of encountering fraudsters. This trend is also why fraud involving children is a growing problem.

Fraudsters are motivated by money — they look for the easiest possible ways to hack into online accounts to drain bank accounts of funds, or to steal virtual goods in gaming platforms to resell them, or to obtain legitimate online credentials, like usernames and passwords, to then resell on the Dark Web to other scammers.

We’ve observed that younger children don’t fully understand security and are naive to the need for security because they don’t necessarily comprehend the extent of risk online. The knock-on effect is that children tend to create simple credentials that are easy for fraudsters to leverage and children tend to use the same credentials on all of their devices, which gives fraudsters entry into more of their online accounts.

Some of the most common attacks fraudsters use that could impact children include phishing, account takeover, credential stuffing, social engineering and synthetic account creation.

>> Plus: Phone Scams Are Getting Worse—How to Protect Yourself

What is the impact of child fraud on both parents and kids?

Last year, more than 1.25 million children in the U.S. fell victim to identity theft and fraud, costing the average affected family more than $1,100 per attack. Parents have a role to play in bankrupting the online fraud business model. Specifically, parents need tools to teach their children about online safety so fraudsters can no longer profit off their online activity.

The threats that children face in the online world are real. It is hard enough for adults to recognize fraud. Fraudsters are using all available avenues to exploit the innocence of children. These include online bullying, sexual abuse, exposure to inappropriate content, social engineering, malware, ransomware and malicious links. These threats can have serious consequences and can even scar the personalities of the affected children for the rest of their lives.

What are some warning signs and red flags parents should be aware of when it comes to their child’s online safety?

The biggest red flags that parents should watch out for are children making online or in-app purchases without permission, clicking random links in suspicious emails, or sharing personal information with an online gaming friend they have never met in real life.

Any of these actions could lead to child identity theft. As we are in the middle of tax season, parents should watch out for a notice from the IRS that their child’s name or Social Security number is already listed on another tax return.

Other ways to tell if your child’s identity has been stolen:

  • Your child receives credit cards or pre-approved credit card offers
  • A credit report exists in your child’s name
  • Your child receives bills in his or her name

What are some warning signs and red flags parents should be aware of when it comes to their child’s online safety?

As a mom working in the cybersecurity industry, there is plenty that keeps me up at night about the way fraudsters go after our loved ones. To keep our kids safe online, here are the tips I recommend for parents and use with my own two children:

  • You and your child’s personal information is online currency to cybercriminals so keep it safe.
  • Teach your child to understand the different ways a bad actor could approach them and how to spot something suspicious.
  • Ensure your child understands to never reveal personal information such as their name, address or even school name.
  • Create different passwords for every account you sign up to and save them somewhere safe.
  • Make sure that they have a gaming or social profile ‘nickname’ that they use instead of their own name.
  • Keep their online pictures generic and never post or share personal images such as selfies.
  • Ensure that your child is using the family device or computer in a room that is shared with a responsible adult. Never let them play alone.
  • Never give your child your credit card details or save them to any of their gaming or social accounts.

How has the pandemic led to an increase of this problem?

As children’s screen time has doubled during the pandemic, hackers are increasingly targeting kids for fraud schemes. Our own research found that online fraud rose 85% over the last year, with many cybercriminals concentrating on gaming, online streaming, and social media sites. Some of the most popular online activities for children can turn out to be the most dangerous.

Spending more time online and engaging in numerous online activities on the internet – whether it’s for virtual school or playing video games – is making children increasingly vulnerable to cyber fraud at a much younger age. In fact, Pew Research’s findings reveal that more than a third of children began interacting with devices before the age of five.

What is a proactive way to talk to kids about their safety?

According to our annual global Screen Time survey, 71% of parents worry about the personal information of their children being captured online… yet there is still a significant concern among parents (66% of respondents) who would like more resources to be available that can help protect their children online.

I recently co-authored a children’s book, “ABCs of Fraud,” to fill a gap in online safety information for children. The alphabet book enables adults to have serious conversations about the dangers of online fraud through sensitive imagery and language appropriate for primary-age children. From “A is for Account Takeover” to “Z is for Zero Trust,” the book explains the complexities of online fraud in a simple way that makes it easy for children to understand.

Online fraud is difficult for adults to spot, so it’s a tall ask to expect a young child to know what online fraud looks like. That’s why it is important to start raising children’s awareness about attack types like account takeover, phishing scams, and social engineering from an early age. Just like we teach our children to be wary of talking to strangers in real life, we must make efforts to educate our children so they can avoid bad people lurking on the internet.

More: Impostor Scams Are Up: How to Protect Yourself or a Loved One

Teens can be very defiant of their parents’ rules and wishes; what is the best way to talk to them?

Parents are faced with the challenge of monitoring what their teens do online, while still giving them independence. Although teens are now more familiar with the internet and believe they can navigate it like an expert, they are not necessarily aware of the types of threats that await them online. As a result, parents need to balance allowing their kids to be online with their friends, but ensuring the sites and communication channels they use are safe.

Younger people tend to not understand the extent of online risks, how very costly online fraud can be. Parents can explain the economics behind fraud and the amount of money that is at risk. Online fraudsters are financially motivated; committing fraud is their career.

Parents can also speak of fraud in terms of things their teens care about. For example, if they love video games and have worked hard to attain achievements, speak to them about the importance of protecting their online assets and virtual goods, which have real-world monetary value.

Jeanette Pavini is an Emmy Award winning journalist specializing in consumer news and protection. She is the author of “The Joy of $aving: Money Lessons I Learned From My Italian-American Father & 20 Years as a Consumer Reporter.” Jeanette is a regular contributor to TheStreet. Her work includes reporting for CBS, MarketWatch, WSJ Sunday, and USA Today. Jeanette has contributed to “The Today Show” and a variety of other media outlets. You can follow her money saving tips and ways to give back on Facebook: Jeanette Pavini: The Joy of $aving Community. Find links to her social media and her book at

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