Foster children struggle with identify theft

By Paresh Dave
Published: Saturday, Jun. 25, 2011 - 12:00 am | Page 3A
Last Modified: Tuesday, Jun. 28, 2011 - 12:46 pm
Four years after Sacramento County Child Protective Services removed Katrina Haywood from her mother's abusive grip, the woman still has managed to stand in the way of her daughter entering college, finding a job or paying for the roof over her head.
Haywood, 18, has spent the past two months starting to clean up a mess that foster care workers say she couldn't have prevented.
Eight entities, including Bank of America and Pacific Gas & Electric, want a total of $6,000 from Haywood. She says her birth mother started opening lines of credit using subtly crafted aliases and Haywood's Social Security number. Since the bills weren't paid, the credit history associated with Haywood's Social Security number is filled with accounts in poor standing.
Exiting the state's 60,000-member foster system at about the age of 18 is hard enough for teenagers such as Haywood. For one to five out of every 10 children, the situation is even worse. Their Social Security numbers and birthdays, easily accessible to birth parents, foster parents, siblings, social workers and courts, were hijacked so others could get quick cash from banks, keep electricity and water flowing, avoid criminal conviction or even save on taxes and medical costs.
"You're completely at their whim as children," said Sacramento-area social worker John Morton.
The children graduating from foster care then must reclaim their Social Security number – often with little financial wherewithal. Money woes at the state and federal level also have stalled solutions meant to help foster children reverse identity fraud.
"If your credit is bad, you really can't do anything," Haywood said. "You're hit with this big boulder and it just becomes a burden on your shoulder."
She said Target, Century Theatres, Walgreens, Sacramento's Department of Parks and Recreation and nearly a dozen other employers rejected her due to the bad credit. Haywood said appealing to some of them with a pile of documents didn't help.
She wants to attend Sacramento City College, but hasn't found anyone to finance a loan. She's living in a friend's apartment, where the manager won't assign her a lease.
Peter Samuelson, who runs the national foster children advocacy group known as First Star, said the teenagers are deemed "deadbeats through no fault of their own."
Gov. Arnold Schwarzenegger signed legislation five years ago that required social workers to retrieve free credit reports for foster children shortly after their sixteenth birthdays.
To save the state's social services department a few hundred thousand dollars each year, legislators have delayed the mandate until at least July 2013.
"This is an obvious measure to make sure foster youth can be as successful as possible upon emancipation," said Assemblywoman Susan Bonilla, D-Concord. "It's been very unfortunate that this has been caught up in the budget problems."
Bonilla is carrying a bill only a Senate vote away from the governor's desk that would make the eventual system more efficient. The state's social services department could submit one batch request to credit agencies each quarter instead of more than 100 agencies filing individually.
"The fix is probably federal, but we're going to do whatever we can to open up the conversation in California," said Chantel Johnson, policy coordinator for California Youth Connection.
Later this year, Rep. Jim Langevin, D-R.I., plans to introduce a bill in Congress, with a yet-to-be-named Republican co-sponsor, ordering annual credit checks for foster children and empowering them with a special federally funded endowment.
"That would have helped instead of this being dropped on me now," Haywood said.
At the urging of their county supervisors, Los Angeles foster care officials recently ran credit checks on 2,110 children. About 100 of them had marks on their report, from library fines to outstanding medical fees to $400,000 home loans. All told, 230 different credit accounts had to be erased. A few of them may have been legitimate.
"We are making some real headway on behalf of these children," said Joanne McNabb, head of the state's Office of Privacy Protection, which assisted in the effort.
In Haywood's case, an attorney working pro bono likely will submit dispute letters to the eight creditors. Because she wasn't 18 years old when she supposedly entered into the contracts, her erroneous history should be wiped within a couple of months.
Experts said the "friendly fraud" Haywood experienced is classic for foster children. The final report due next month from the pilot program in Los Angeles will offer the first official clues as to how widespread the issue is.
"All of the exposure hallmarks are there in the lives of foster children for this to be a really big issue," said Matt Cullina, chief executive officer of help service Identify Theft 911. "Not everyone who has access to (their) information has the best interests of the child in mind."