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Dad racks up card charges in son's name

By

Opening Credits
Columnist Erica Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for CreditCards.com.

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Question for the CreditCards.com expert

Dear Opening Credits,
My father had opened a credit card in my name without my knowledge and consent a few months back and racked up over $5,000 in charges on the card. Although this sad and illegal issue occurred, we agreed he would make the payments. However, due to his recent medical issue, he can only make the minimum payment each month, which is keeping this debt on my credit. Is there a way to transfer this debt into his name if he has no credit? I fear if I contact the credit card company and let them know and go through their process, the police will get involved and possibly go after him. Please advise. -- Anthony 

Answer for the CreditCards.com expert Dear Anthony,
Sadly, I can't say that this is the first I've heard of such a crime, and when I do, I usually recommend going straight to the authorities.

However, I gather you want to protect your father and are looking for a way to fix the problem while ensuring he doesn't go to jail. Well, don't fret about him spending time behind bars. That's an unlikely scenario, especially if you're not willing to press the matter legally. Yes, fraud was committed, but the credit card company is more interested in getting paid than in finding out who applied for the account and went shopping.

There are a couple of ways the two of you can find resolution. The first option is for your dad to sell something of his that has significant financial value. For example, he may have a car that he can put on the market. Once someone buys it, he can present you with your portion of the proceeds so you can delete the balance.

If he didn't come up with that idea on his own yet, though, you'll have to present it. This can be an uncomfortable chat. But remember, Anthony, you did nothing wrong. Address the matter from that angle, and try to not feel bad for him. He had no problem ruining your credit and causing you grief. All you're looking for is resolution.

Dad has no property to sell? The second option is for him to explore alternate forms of credit. I'm assuming that he took a good card out in your name because his own credit was shot. Still, that doesn't mean he can't get a loan from a less desirable source. While I would never suggest responsible people such as yourself explore payday lenders or car title loans, I have no problem having him do it. He can borrow the money from these businesses that offer expensive, penalty-heavy loans and then hand you over a check. Then he'll be stuck with the debt and repercussions. Seems to me if he can make the minimum payments to you, he can make them to a company.

If you can't convince your father to do either, then you must make a decision. Because you didn't apply for the card or spend the money, you are not liable for the charges. Revisit the idea of contacting your credit card company and disputing the fraudulent charges. Yes, you'll probably have to file a police report, and yes, he might get in trouble, but you won't be held liable and your credit will be cleared.

Or you can repay the balance as best as you can, with a combination of dad's meager contributions and your earnings. Have him owe you the money personally and consider charging him interest.

Finally, close the account he opened so he can't use it any more, then add a fraud alert to your credit reports to make it harder for him to target you again.

See related: Your options aren't pretty when a relative gets plastic in your name, When family members ruin your credit, How to cope with massive family credit card fraud

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Published: February 1, 2012


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