Tackle credit card fraud fast, whether parents or strangers are to blame
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Dear Opening Credits,
Hello! My name is Denise, and I am 21 years old. I go to school and work full time. I decided to apply for a credit card, but I kept getting declined. I finally checked my credit report, and my score is very low -- in the 500s. I then saw that there was a credit card from Capital One that was taken out in my name in 2007 and never paid. It was a debt of $900. I remembered that my mother had taken one out in 2007 to "build" my credit. I was angry and never used it because my mother kept it and made charges without my consent. I was receiving numerous calls and letters from Capital One, and my mother and father said they had paid it off after two months of me harassing them. Apparently, they lied, and it never happened. I don't know what to do because I can't afford paying off that huge sum. Will I ever be able to take out a credit card again? Can I fight this? If I pay it off myself, can I still use the Capital One card, even though it is delinquent right now? Stressed and hopeful. -- Denise
I wish I could save all the kids who've been financially (and otherwise) abused by their parents. That would include you, Denise. Although your mom claimed benevolence, what she did was actually self-serving. Oh, and unfair, immoral and illegal, too.
It seems that mom used your name and Social Security number to get that credit card. If at the time you were under the age of 18 (since this happened in 2007 and you're 21 now, it could go in either direction), she must have also forged your date of birth to appear as though you were an adult. When the account was opened, she began charging but didn't pay the bills. As the card is in your name, Capital One began reporting the missed payments and overdue balance on your credit reports.
Now, it is possible that your parents did pay the debt off. It can take a month or so for a creditor to update an account and send the new information to the credit bureaus. Ask them if they have proof that they sent the money. If they do, good. Check the reports next month to make sure the debt reads as paid to zero.
Even if this is the case, however, your credit will continue to suffer because evidence of the delinquency will remain on your reports for seven years from the date of the last activity. That's not acceptable. Because your mother committed a crime, I conferred with Linda Foley, founder of the San Diego-based Identity Theft Resource Center* about what you should do.
Foley suggests that you file a police report and then contact the creditor and credit reporting bureaus to dispute the debt. With the report, you should be able to wipe your credit clean. "Whether the matter actually winds up in court is up to the police," says Foley. "But if it does, it could result in a felony with probation. The mom will have to make restitution with the appropriate company."
Not a direction you want to travel? Well, if you were underage when your mom applied for the account, you may be able to have the information removed from your reports by just sending the bureaus a copy of your driver license and birth certificate as proof that you were under 18. Unless emancipated, minors can't enter into financial contracts, so you can dispute it purely on that fact.
If you were an adult at the time, Foley offers another remote option -- albeit a more remote one. Capital One may be willing to transfer ownership of the debt to your mom. "It would have to be an agreement in writing between the creditor and the mother, though, not the mother and the daughter." They would also have to consent to stop reporting the history on your credit report and list it on hers instead. You can also sue mom in small claims court. If you win, you'll get the money to pay down the debt, but it will do nothing for your credit report.
Whatever you choose, don't pay a penny on this fraudulent account, and make sure you cancel the card. Clearly your mother knows your Social Security number, so offset future problems by adding both a fraud alert and a credit freeze on your credit reports. After fixing the damage, check your reports for accuracy every three to four months. Then, apply for a secured credit card and start your credit history all over again. You sound like a responsible young woman, and as such will be a wise cardholder.
Correction: As originally published, the name of the Identity Theft Resource Center was misstated. See CreditCards.com's corrections policy.
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