When a family member steals your identity

Things you can do to repair your credit

The Credit Guy columnist Todd Ossenfort
Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly "The Credit Guy" column, answering reader questions about credit counseling and debt issues.

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Question for the CreditCards.com expert

Dear Credit Guy,
What do you do when a family member steals your identity? Can you get the debts transferred to her name? Or can you press charges without her facing jail time, but having to pay fines or assume all debt? -- Mike

Answer for the CreditCards.com expert

Dear Mike,
Ouch! Identity theft is one of the fastest growing crimes in America, victimizing over 10 million people a year and costing billions of dollars according to the Federal Trade Commission. This offense, in most circumstances, carries a maximum term of 15 years of imprisonment, a fine and criminal forfeiture of any personal property used or intended to be used to commit the offense.

Theft of your identity is time consuming to solve and can be quite expensive before you can successfully reach a final resolution. Adding the fact that the thief is a family member complicates things a hundredfold. The key for you in this situation will be to gather all the pertinent information and then to communicate with your family member.

First, if you have not done so already, get copies of your credit reports from the three major bureaus so you will know the extent of the damage. When you contact the bureaus, I would also place a fraud alert on your credit history so that creditors are asked to verify your identity before granting credit. Consider a credit freeze, which bars new accounts from being opened in your name.

Next, contact the creditor(s) and close the account(s) that was opened in your name without your permission. This will keep your family member from having any further access to the account.

Once you have all the information for the account(s) that your family member opened and used, you have a tough decision to make. As a victim of identity theft, your next step would be to use the information from your credit reports and file a report with the police. Most creditors will not remove your name from the account and absolve you of the responsibility without a police report.

Of course once a police report is filed, the cat is out of the bag. The authorities can and probably will pursue charges against this criminal, family member or not, for credit fraud. Remember, you did not cause this situation, your family member did.

If you would like to try and resolve the situation without involving the police, take the information that you have gathered and make contact with your family member who is the identity thief. Calmly let the person know that you are aware of the accounts that were fraudulently opened without your permission and that you would like the accounts to be paid in full. You will know by how the person reacts whether this is a viable alternative to letting the authorities handle the situation.

Anything other than a sincere, "I am so sorry and I will take care of this immediately," will let you know it might be best to let the long arm of the law handle it and go through the process of having the accounts removed from being your responsibility.

If the family member is willing to pay, then you can both contact the creditor(s) and determine if the creditor will allow the account to be placed in the family member's name. Many creditors will not be willing to do this, so be sure your family member knows that they may have to pay the entire balance in one lump sum payment rather than over time in order to satisfy the creditor.

It has been my experience that someone who is willing to steal a family member's identity is most likely not going to be able to pay the balances due on accounts opened fraudulently with a single payment. If you decide to try and keep peace in the family by paying the accounts off over time rather than have the authorities get involved, remember that any negative information on your credit reports from the opening of the fraudulent accounts will remain on your report for seven years.

I would recommend that you ask any other family members, who are probably encouraging you to "keep the peace," to step up to the plate and sign a promissory note that guarantees payment to you by them in the event of default by the identity thief.

Take care of your credit!

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Updated: 08-19-2018