July 23, 2007 -- On paper, Randy Waldron Jr. was $2.5 million in debt and a convicted felon. He owed hundreds of thousands of dollars to credit card companies, owed back taxes to the state of Florida, and had liens and civil actions against him.

In reality, Waldron was a 17-year-old high school junior living in New Hampshire, who in 1998 couldn't get a student loan for college or a credit card because his Social Security number had been stolen when he was just 1 year old.

Making matters worse, the man who stole Waldron's identity was his father.

"My father was charismatic, attractive and successful. He always had money and was never broke," Waldron told ABC NEWS.com.

"He maintained that image until 1998 when I was getting ready to graduate from high school. I wanted to be an airline pilot and applied to every college with a program, but was rejected by all of them. I couldn't understand, because my grades in school had always been good," he says.

"At about the same time, I received rejection letters from credit card companies and financial aid institutions. … I wrote to get my free credit report and when it came back it was 50 pages long," he says. "I was 17 years old and had liens against me. I owed Master Card and Visa hundreds of thousands of dollars and back taxes in Florida."

Soon after Randy was born in 1981, his father, Randy Waldron Sr., left his mother and moved to Florida. By 1982 Waldron Sr. was fraudulently using his son's spotless identity as his own

Waldron was one of thousands of children whose identities are stolen every year. With the proliferation of the Internet, identity theft has become easier, experts told ABC NEWS.com. Children are particularly vulnerable to having their identities stolen by family members.

Of the 246,035 cases of identity theft reported to the Federal Trade Commission last year, about 5 percent, or 12,301, involved children.

Children are often the victims of identity thieves because their credit and backgrounds are clean, Social Security numbers are not linked to their owners' names or ages, and victims typically won't realize there is problem for many years, said Linda Foley, founder of the Identity Theft Resource Center.

Children's Social Security numbers, when not stolen by family members, are often acquired by people who work in schools, hospitals or doctors' offices where there is easy access to personal information, she says.

Lists of Social Security numbers can also be easily purchased through the Internet.

Foley says there were more than 204 security breeches last year, with more than 88 million records compromised. A small number of those records, she says, will get into the hands of identity thieves.

Families whose children have been victimized find out in a variety of ways, she says.

"They may start getting phone calls from a collection agency, or when a child applies for a driver's license they'll find out there are warrants for DUIs. In a family where the parents are divorced, one parent is sometimes tipped off when they see the child's name appear on the caller ID."

Foley says her organization is working with members of Congress on a bill that would let credit institutions know which Social Security numbers belong to minors.

"Credit issuers are blind. They don't know if a Social Security number belongs to a 10-year-old or a 40-year-old. They are given out in order off a list, so consecutive numbers could go to a 4-year-old, or to a newly naturalized 40-year-old immigrant," she says.

She says when children learn they have been victimized by family members, it can be extremely damaging emotionally. "These kids feel anger and betrayal, but they also very often feel ashamed. They often don't know who to turn to to tell, and they don't want to turn their parents in."

Clearing one's name and getting a new Social Security number is a difficult, protracted process and can create new problems for a victim.

Waldron says he spent nine years trying to get a new Social Security number. Working as a flight attendant after the Sept. 11 attacks, he says a background check found his father's felony convictions on his record and nearly cost him his job.

Police in two states and the Social Security Administration for years told him there was nothing they could do.

It was not until 2004 that the law and understanding of the problem caught up with the reality of his situation and he was issued a new identity.

From there, he says, a new host of problems arose. Within a few months the military came after him, threatening to arrest him for not having registered with the Selective Service System. With no driving record, he found it difficult to get insurance.

In addition to protecting your child's Social Security number, parents should regularly check their children's credit report.

Everyone is entitled to a free credit report annually from each of the three major companies that create the reports, according to the Federal Trade Commission.

"Consumers are entitled to receive a free copy of their credit report once a year from each of the three reporting agencies. Consumers who are concerned about their children can ask about their credit reports to find out about accounts in their name. … If parents begin receiving offers of credit for their children that is a sign that the child may be at risk, and they should request a report," the official says.