This document will explain the issue of identity theft and fraud when youth in foster care are the victims. The population, youth in foster care, is particularly vulnerable to this type of criminal activity, because of the way in which the U.S. foster care system uses a foster child’s personal information, such as their Social Security number, as an identifier and the fact that youth in foster care are exposed to many more people that have access to this information.
Specifically, the focus will be on a portion of the Child and Family Services Improvement and Innovation Act that aims to protect youth in foster care from exiting the system burdened by someone else’s debt and with damaged credit. Included is an analysis of how this legislation was created, how it helps the population of foster youth, how effective it is, and if is it the best solution to the problem.
Overview of the issue
Foster youth are incredibly vulnerable to identity theft and fraud. Because they are under the care of government, they should be protected as much as possible with appropriate policies that govern how they are treated within the foster care system. As foster youth are moving throughout the foster care system, their social security number is used as their identifier. This policy creates deep problems for many members of the foster youth population, by exposing them to criminal activity against them. Every social worker, foster parent, group home staff member, and family member has access to this information. Any one of them can open credit cards in the child’s name and rack up debt without the child finding out until after they turn 18 and age out of the foster care system and are trying to open up their own line of credit. Then, once they learn that their credit is damaged and they have fraudulent charges and debt attributed to them. Foster youth need to go through the process of fixing their credit before they can establish themselves as adults in society. While re-establishing their credit, everything else in their life is pushed back, including getting a car covered by insurance, applying for financial aid to get into school, etc. When biological parents fail to take care of their children, it is the responsibility of the government to designate a safe and nurturing environment for them to grow up in. In creating a system where identity theft and fraud can happen to these vulnerable youth so easily, the government is failing children and allowing unnecessary burden to set back their lives.
All people deserve consumer protection rights. The actual perpetrator should be held accountable for their crimes, not the victim. But what ends up happening in American society is that because there is a lot of bureaucracy involved in proving the crime, the victim of identity theft or fraud spends an average of 330 hours and pays an average of $850 in expenses to repair damage to their credit. For a youth aging out of the foster care system, without familial or adult mentor for guidance or financial help, this is a huge roadblock to achievement. As victims of fraud or identity theft with bad credit, young persons would be nearly unable to get loans for apartments, to apply for and secure financial aid in order to attend college, or to buy cars and purchase car insurance (a necessity in some suburban or rural areas). While others have a network of support that includes family, many youth in foster care don’t have these relationships on which they can rely. They then end up homeless or living in situations where they can’t establish a line of credit.
As of 2011, an estimated 1,530 youth were in foster care within district 15, though it is the smallest district in the U.S. This group is under the care of the city’s child welfare system, the NYC Administration for Child Services (ACS). In District 15, there are many organizations that work with youth in foster care. Association of Black Social Workers, CAP4Kids Children’s Advocacy Project for New York City, Catholic Guardian Society, Catholic Charities-Archdiocese, Harlem Dowling Ujima, The Children’s Aid Society, Children’s Rights, Children’s Aid Society Foster, Harlem Dowling West Side Center for Children and Family Services, Child Welfare Organizing Project, Harlem Children’s Zone, United Families of East Harlem, Edwin Gould Services for Children and Families, Foster Parent Advocacy Foundation Inc, Washington Heights Family Preservation Program, National Resource Center for Permanency and Family Connections (NRCPFC) at Hunter College School of Social Work. The network is quite extensive, and previous District 15 representative, Charles Rangel, worked with many of these groups in order to provide increased support and services to youth in foster care.
Protecting and caring for our youth in foster care is a bi-partisan issue. Rangel has worked with Republicans in the past on issues involving the child welfare system. The Democratic and Republican parties have shown they can work together and produce legislation that will make the foster care system better. In 2008, Fostering Connections to Success and Increasing Adoptions Act was passed. The bill promotes permanent families and was supported by many, regardless of political party. This shows that both parties are open to change, as long as the legislation is presented in the right way.
The Legislative Process
Foster youth are often not able to advocate for themselves, as minors and with no easy way to organize. Foster youth organizations all over America have voiced their need for legislation helping them when they become trapped because of these crimes of fraud and identity theft perpetrated against them. They find themselves unable to move forward and end up wasting time and money as they try and repair their credit. In some cases, their identity is stolen by someone they know, like a family member, and they do not want to accuse them of identity theft or fraud and press charges against them, so they end up paying for someone else’s debt in order to move on with their lives. Because of the prevalence of this issue, many states have tried to pass legislation and have had no trouble finding foster youth to testify at a hearing that have been in this exact same situation.
Congressman Jim Langevin, democratic representative from Rhode Island, put forth legislation in 2011 that would help protect foster youth from leaving the foster care system with damaged credit due to another’s actions, as well as prepare them with some tools that would help them become independent financially. Congressman Langevin has spent a lot of effort on the issues of foster care. When Langevin was younger, his parents ran a foster home. He takes pride in his initiatives to improve the experience for children in the foster care system within Rhode Island. His position on the House Armed Services Committee, where he chairs the Strategic Forces Subcomittee gives him some power, but not on issues of child welfare. He also serves on the House Permanent Select Committee on Intelligence and the House Committee on the Budget. He has made himself an expert on a variety of issues, including cybersecurity and respite care and health reform. It can be said that working with youth in foster care is a more personal issue to him, and this bill was his way of advocating for the population nationally. His work on this legislation won him a First Focus Campaign for Children award “Defender for Children,” for his advocacy and policy work. This award acknowledges the work of the top 100 congressmen that do work for children.
The bill was supported by a research report created by Firstar and the Child Advocacy Institute (CAI), The Fleecing of Foster Children. First star works to establish best practices and better outcomes that benefit children in child protective services, dependency courts and foster care systems across the U.S. “First Star balances education, policy and research with public awareness to heighten visibility and to deepen knowledge about the plight of society’s most vulnerable children – those who are abused and neglected” (First Star, 2012). The Children’s Advocacy Institute (CAI), co-author of the research document, was founded at the nonprofit University of San Diego School of Law in 1989, is an academic, research, and advocacy law firm. “CAI represents the interests and rights of children and youth in impact litigation, legislative and regulatory advocacy, research and public education projects, and public service programs. CAI’s academic component trains law students and attorneys to be effective child advocates. Active at both the state and federal levels, CAI’s advocacy program seeks to improve the status, health and well-being of children and youth in all areas of their lives, with special emphasis on improving the child protection and foster care systems and enhancing resources that are available to youth aging out of foster care and homeless youth” (CAI, 2012). Child advocates would be especially affected by this law, because in cases of fraud and identity theft, a child advocate would have to be utilized to file criminal charges, prove the criminal activity, and fix the damaged credit. These agencies were able to work together to perform original research on the topic of identity theft and fraud to educate the public about the prevalence of identity theft and fraud in foster youth. Their research is intended to inform policy, which it was able to do, in the case of Congressman Langevin’s bill.
The full bill, supported by this research, was introduced on September 15, 2011. The Foster Youth Financial Security Act of 2011 was given the number H.R. 2953. It includes four major provisions. 1) Provide credit reports for children before they age out of the foster care system at 18. 2) Establish Individual Development Accounts, which are matched-savings accounts intended to be used to buy assets and set a foster child up for buying necessary large-budget items for living independently. 3) Require state evaluations for certain programs that are intended to help foster youth transition out of the system. 4) Eliminate the use of Social Security numbers as an identifier for a foster child. This bill was introduced in the Committee on Ways and Means with three co-sponsors: Representatives Karen Bass (D-CA), Keith Ellison (D-MN), and Pete Stark (D-CA).
Congressman Langevin worked closely with Stark, a member of the Ways and Means committee to advocate for this issue. The bill in its entirety was not going to be passed, so they pushed to get part 1, regarding acquiring credit reports, of the original bill H.R. 2953 into the Child and Family Services Improvement and Innovation Act, which was also presented to the Ways and Means Committee by Representative Geoff Davis (R-KY), and was passed in 2011. Geoff Davis, a solid Republican, is no longer a Congressman, citing family health issues as the reason he resigned from his post in July 2012. Davis was Chairman of its Subcommittee on Human Resources, which oversees certain welfare programs, including child care, child and family services, child support, foster care, adoption, and aspects of unemployment benefits. Davis was in a more powerful position than either Langevin or Stark, which may have helped his bill pertaining to foster youth get passed more easily.
The bill, pertaining to improving the foster care system, added a part in Section 106 titled: Provisions Relating to Foster Care and Adoption part b subtitled: Foster Youth ID Theft. This is a requirement for each caseworker to obtain a credit report for any of their clients for each year between the ages of 16 and exiting the system. In addition to that, they must also provide assistance to the youth in fixing any fraudulent charges BEFORE they exit the system, including obtaining a court-appointed advocate for counsel.
FOSTER YOUTH ID THEFT.—Section 475(5) of such Act (42
U.S.C. 675(5)) is amended—
(1) by striking ‘‘and’’ at the end of subparagraph (G);
(2) by striking the period at the end of subparagraph (H)
and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(I) each child in foster care under the responsibility
of the State who has attained 16 years of age receives
without cost a copy of any consumer report (as defined
in section 603(d) of the Fair Credit Reporting Act) pertaining to the child each year until the child is discharged
from care, and receives assistance (including, when feasible,
from any court-appointed advocate for the child) in interpreting and resolving any inaccuracies in the report.’’
Though it is a very small section of the final bill, each caseworker must comply starting in 2012 and it will protect many youth being unfairly held back in life due to other peoples’ criminal activity. The caseworker is well equipped to carry this job out. A caseworker retains a mostly permanent relationship with the foster youth while they are in the foster care system, even as they change placements over the years.
The Child and Family Services Improvement and Innovation Act was passed in the House with one amendment to a different part of the bill and passed in the Senate, S. 1542, without amendment co-sponsored by Senators Max Baucus (D-Mont.) and Orrin Hatch (R-Utah), and Representatives Geoff Davis (R-Ky.) and Lloyd Doggett (D-Texas).
The bipartisan legislation reauthorized child and family service programs under Title IV-B of the Social Security Act and renewed Title IV-E state child welfare waiver authority for the U.S. Department of Health and Human Services (HHS). The largest program created from Title IV-B was the Promoting Safe and Stable Families Program (PSSF), which was created in 1993 by an amendment to the Social Security Act, PSSF was reauthorized in 1997 and again in 2001 under the Adoption and Safe Families Act. PSSF supports a variety of services for families with children and is one of the few sources of federal funds directed toward the prevention of problems that bring families to the attention of the child welfare system (Georgia Dept. of Human Services, 2005). PSSF and the other programs in Title IV-B parts one and two expired on September 30, 2011. This bill was signed and made into Public Law No: 112-34 on September 30, 2011.
This bill was only passed due to the bi-partisan support of the two parties, the same way the Fostering Connections to Success and Increasing Adoptions Act was passed in 2008. The original legislation that Langevin put forth was only sponsored by four democratic congressmen, which may have stalled its progress. By working with the Republican Party on a broader bill that was up for reauthorization, there was a better chance of getting the policy mandating credit checks for youth 16 and up in the foster care system.
Policies that were in place previously that address the problem
Several states have enacted similar laws previously. For example, Connecticut passed legislation requiring credit checks for all youth 16 and older in the foster care system, and reporting those findings to the office of the Chief State’s Attorney and the foster youth, foster parent, caseworker, and legal representative (CAI & FirstStar, 2011). The law is quite comprehensive, but does not require the state to help the youth get out of the problem in any way after that. The provision in the Child and Family Services Improvement and Innovation Act extends further and requires a fix to the youth’s credit before the child exits the system. That last step in fixing a youth’s credit before they exit the system is what is most effective in helping foster youth. They are given a better opportunity to successfully transition out of the system, making them on my level ground with others of their age.
The Federal Fair Credit Reporting Act covers most consumers, but has nothing that protects the specific needs of children in foster care. No credit reports are being done on minors, so there is no chance to catch the fraudulent activity until it’s too late. This legislation is needed to protect the vulnerable population while they are still in the care of the government. The government must act as parents to those in the foster care system, and must protect children from being used and abused, even if it’s by a financial institution. The foster youth is not to blame for the situation, and it is unfair that being a victim of fraud of identity theft can ruin their chances at a better future by way of gaining an education or living debt-free.
Why this law is important
Youth transitioning out of the foster care system are facing so many issues. At the root of it, they need to become financially self-sufficient, start working and making enough to live on their own; paying for rent, groceries, utilities, and insurance. This is basically impossible for an 18 year old while in school, which is a main reason why only 3% of youth in foster care complete a 4-year degree. The median age of initial self-sufficiency for the average American youth is 26, with the median amount parents spend on their children each year after they turn 18 being $50,000. It is unfair that foster youth are expected to live without financial assistance at the age of 18, when so many others are coming from a different place. The child welfare system perpetuates a cycle of poverty. Though many look to continuing their education, it seems unfeasible to them because they are funneled into a position where they need to take on loans to pay for a higher education, but also need to work long hours at minimum-wage jobs for their basic necessities. Without good credit, one cannot receive the federal financial aid necessary to attend college. This is a group that also must attend school without the financial support many people in America get from their families.
Statistically, youth who age out of the foster care system have much lower achievement rates than the average American. As stated previously, only 3% of foster youth are able to attain their Bachelor’s Degree. This lack of education lowers their earning potential, raising the probability that they will stay in low-earning jobs for the rest of their lives. By age 24, less than half of foster care alumni were employed in 2011. This is including even the lowest-paying, part-time jobs. Adding the 9% that cannot join the workforce due to disability or incarceration, many spend part of their lives as unemployed and must rely on the government for welfare. Also at age 24, 37% of foster youth alumni have experienced homelessness (which includes crashing at a friend’s or relative’s home for a temporary amount of time). These poor outcomes become costly for states. One analysis estimated that the cost of each annual cohort of youth aging out of the foster care system is approximately $5.7 billion; these costs comes in the form of lost earnings (and thus lost revenues), criminal justice system expenditures, and unplanned pregnancy expenses such as government cash assistance and health programs (CAI & FirstStar, 2011).
Many youth in foster care have zero concept of financial literacy. Living in group homes and institutions, one does not see an adult paying the bills, filling out tax forms, or other mundane tasks necessary for living independently. When a youth finds that they’ve been a victim of fraud and are carrying someone else’s debt, this problem is greatly magnified. Youth try to navigate a financial system that they’ve never experienced without aid, so it becomes necessary to hire a legal consultant, which is often too expensive for someone in this situation. Having a youth stuck in this process while making the transition out of foster care is fundamentally unfair. It hinders them from attaining independence and growing developmentally and achieving what they would like to get out of life, whether it is a higher education degree, a better-paying job, or a lifestyle where they are able to get the home and vehicle that they want.
Opposition to the bill
Individual child welfare agencies have not fallen in line behind this portion of the passed bill, because it would require their workers to conduct the credit checks. Many doubt that they feasibly have the resources to follow through. In Connecticut, where they passed a bill in 2010 that would require credit checks for youth in foster care, the Commissioner of Department of Children and Families, Susan I. Hamilton, testified: “The Department of Children and Families (DCF) appreciates the intent behind HB 5196 . . . but has concerns that the obligations imposed on the Department by the bill may not be achievable, particularly within available resources.” This concern should be laid to rest with the use of Title IV-B funds that the bill is tied to.
Some oppose the Child and Family Services Improvement and Innovation Act on the grounds that Child Protective Services (CPS) has too much power, and is a government entity that meddles in families’ personal business. CPS has a bad reputation in America as an unknown force that takes away children from their families if they perceive any wrong-doing, without parental consent. However, this bill, while widening the parameters of what CPS can do, prioritizes family reunification. Also expanding are the services to children already within the foster care system, which does little to affect families outside of the system.
Is it the best solution to the problem?
This federal policy is more effective than any state policy in place. It works to correct a problem that occurs before the youth tries to use their credit and learns that they’re been a victim of fraud or identity theft.
A way to insure that foster youth will be protected from fraud and identity theft more effectively is to amend the policy that is at the cause of the problem. Foster youth identifying information is accessible way too many people. An alternative to using the Social Security number as an identifier, is to number youth as they do in the adoption system and keep the number consistent throughout their time in the foster care system. Also, limiting the number of people that will have access to the social security number, which will be difficult as the information belongs to a minor and is necessary for many different programs that foster youth need to be a part of. It would be a huge overhaul of various systems to no longer need a person’s social security number to become a part of a program. A workaround may be to find one person in a foster youth’s life that will be responsible for this information. This would require all necessary paperwork that requires a Social Security number would go through this one person. Limiting the number of people that have access to a youth’s Social Security number may be unachievable, but adding a clause to the federal law that uses a different number as an identifier while a foster youth is in the system would lower the number of cases of fraud and identity theft, lowering the amount of money the government will pay in fixing damaged credit of foster youth victims.
The Child and Family Services Improvement and Innovation Act deals with the issue of foster youth leaving the system with unknown debt caused fraud and identity theft in an effective manner in the context of the current foster care system. The bill helps free foster youth that would otherwise be burdened by debt that would keep them from achieving positive outcomes in the future.
As a bi-partisan issue, Congresswoman Sanchez will have the opportunity to work with Republican representatives and build relationships across party lines. This could be helpful when working on more dividing projects when bi-partisan support is necessary. Rangel was an active advocate for foster youth, and continuing that legacy, including the work he did with many agencies in the district, may be beneficial work for the community.
The Ways and Means committee is very influential. As a budgeting committee, a seat here would allow Congresswoman Sanchez influence on where federal funds would go. Rangel was also a member of this committee, perhaps continuing relationships built by him could be useful in Congresswoman Sanchez’ interests.
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