How to defend yourself against collectors when the debt isn't yours
By Sally Herigstad
To Her Credit
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006).
Dear To Her Credit,
An ex-roommate opened a credit card account in her name and
put my name as an additional user on the account without my knowledge or
consent. She did not sign my name or give any other information like my Social Security
number. She ran up over $1,000 in charges on the account and defaulted. I did
not even know the account existed until collection efforts began. The bank is
trying to get me to pay the bill -- even though the collections agency
acknowledged that I'm not listed as a jointly responsible party or primary
debtor on the account. My Social Security number is not associated with the
account -- which TransUnion has confirmed.
I filed a police report and submitted it to both the bank
and the collection agency. Is there anything else I should do? TransUnion
deleted the delinquent account from my credit report in February 2008. Could it
"re-appear" on my credit report? Any help you can provide will be
most appreciated. -- Karon
Dear Karon,
This happens more often than you would think. It's so easy to
add someone to a card as an authorized user -- you don't need their signature,
financial information, or knowledge. If you can spell someone's name, you can
add them to your card.
You have no financial responsibility for this account, and
the bank knows it. That doesn't stop unscrupulous companies from trying to
collect, however.
You are experiencing debt collection violations.
According to Georg Finder, Independent Credit Evaluator,
the bank is violating the Fair Debt Collection Practices Act,
a federal law since 1977. The bank knows you are not responsible for the bill. Because
the collections agency and TransUnion agree you are not responsible for this
debt, Finder says, "The lack of responsibility has been acknowledged by more
than one entity, so that one collector pursuing it is in violation of the law."
You're on the right track for fixing this problem. Filing a
police report was the right thing to do. Adding you as a user is not a crime, but
identity theft is. You don't know what else she has done with your name and
information, so having a report on record is a good precaution.
Notifying the credit bureaus was also smart. You need to do
a few more things to protect yourself:
Check
your credit report and the interest rates on any other credit cards you
own. "If they put it in her credit report and she has other credit cards,
they will see that and her interest rates will rise," says Finder. Your
ex-roommate's shenanigans can make the interest rates on all your cards go
up!
If your
credit is affected, get legal help. Finder says you should be able to get
a lawyer who will take your case "on spec," meaning you don't have to pay
an upfront fee. You may be entitled to $1,000 in statutory damages per federal
law, plus you are entitled to additional damages if this has affected your
credit. (You can find a lawyer through your county bar association.)
Make
the bank stop harassing you. The creditor may have given up collecting from
your ex-roommate, but he's looking for anyone with a deep pocket --
whether he violates the law or not. "Overwhelmingly, they know the law,
but they're ignoring it," says Finder. To stop the harassment, you can't
just meekly say, "Go away." Send a letter to the collector or account holder saying why this is a harassing and
improper activity, and state that if they continue to report this to the
credit bureaus, you will protect your legal rights. Specifically tell them
to "cease and desist."
Rarely,
a company will keep trying to collect even after being told to stop. If they
call you again, keep a diary of calls made to establish a willful pattern
of violation. If they put your information in a credit report, save a
record. Victims of this kind of harassment are entitled to up to $1,000
per violation. Finder says, "It gets even more exciting if there is
provable credit damage." Finder tells about an extreme case that went to a
jury trial in Los Angeles,
where the plaintiff was awarded $290,000 for what he went through.
There's no reason for you to be harassed for someone else's
bills. Stand up for yourself, and get help if you need it! Good luck!
Sally Herigstad writes about women and credit every week for CreditCards.com. Herigstad is a writer and finance consultant for MSN Money, a personal finance software product. She is also a member of the Washington Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Her Web site is http://helpicantpaymybills.net. Sally Herigstad lives in Kent, Wash., with her husband Gary. They have two grown children, Valia and Grant.
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
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