Clear a minor of responsibility for card debt in 5 steps

How to undo a sad case of parental identity theft

Opening Credits columnist Eric 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

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Question for the expert

Dear Opening Credits,
My grandson, who lives in California and is in his early 20s, has a credit problem. When he was 17, his mother opened a credit card in his name, adding one year to his actual age. He signed nothing except the back of the card. He charged nothing, but his mother did -- $1,500, in fact. Before he was even 18, the card was blocked for nonpayment. He says he never charged anything on the card, but now he has a collection agency after him for over $7,000 because of interest and late fees. His credit is in ruins. The agency a few months ago offered to settle for $800, but he could not afford to pay even this. I would like to help him, and I have read that since he was not 18 at the time the card was taken out, he might not be responsible. Should he try to settle with the collection agency? If he brings up the fact that his mother marked up his age on the application, will it put her in jeopardy of being charged for fraud or something similar? Your advice will be appreciated. -- Worried Grandparent

Answer for the expert

Dear Worried Grandparent,
Sadly, I'm no longer shocked by the horrible ways in which some people use money and credit to harm a loved one. What your grandson's mother (and I use that familial title loosely) did to her child is truly appalling. Not only were her actions illegal, they were selfish and abusive. By borrowing his identity to obtain a credit card, purchasing items for her personal use and then not paying the bill, she put her son in a rotten position. He now has to deal with collectors and repair some pretty serious credit damage -- not to mention contend with his own mom's betrayal.

I'll begin with the crime. The law is clear: You cannot use someone else's personal and financial information to apply for and receive a loan or line of credit. It's fraud, and if this is what your daughter or daughter-in-law did, she committed a felony for which she can be prosecuted. Of course, most children are loath to take such action against their parent, even in extreme circumstances. Thankfully he probably doesn't have to.

Minors (unless formally emancipated) cannot enter legal contracts, and a credit agreement is such a contract. His signing the back of the card is irrelevant. The paperwork his mother filled out contained deliberately erroneous information: the false date of birth she listed is clear evidence of deception. If the account was still with the original creditor, they may have chosen to press fraud charges against her had they known what really happened. As it stands, though, a collection agency has purchased the balance, and in general, all these businesses care about is recouping their investment.

So can the collection agency force your grandson into paying his mother's debt? Highly doubtful. The year he was born is his perfect defense. According to Clinton David, an attorney out of Dallas, it shouldn't be too hard to clear him of responsibility. Says David, "Report that he was a minor, and that he was not of legal age to contract with the credit card company."

I gather you are trying to help your grandson out of this situation, so here's what you can do together:

  1. Call the credit card company and ask to have a copy of the original application with the false birthday and the date the application was submitted sent to you.
  2. Contact the collection agency by phone and explain, in no uncertain terms, that the account was fraudulent, and the debt is not his.
  3. Follow up with a letter to the collector, telling them to cease collection activity and to not list the account on his credit reports.
  4. Carbon copy the three credit bureaus and the Federal Trade Commission and send copies of the letter with supporting documentation (the copy of that credit application is key) to all parties.
  5. Obtain his credit report from all three bureaus in just over a month's time, and check to see if all records of the account have been expunged. If not, follow the credit bureaus' dispute process.

Now, it's possible the collection agency has a clue that he is not liable for the account, because they offered to settle the debt for a major discount. However, there is no reason he should be out a dime and still have the negative evidence of a fraudulent account on his record if he doesn't have to.

With effort, your grandson will be able to fix this credit mess, but I can offer no such promises about his maternal relationship. It's bad enough when a stranger robs your good name and drags it through the mud, but when the person who gave birth to you does so, the emotional harm can be devastating. I hope she makes amends. In the meantime, he has you, and for that he is quite fortunate.

See related: Key things to know about ID theft, Who's responsible for minors' card debt?, Tips for dealing with debt collectors and collection agencies, Debt collection sample letters, How to get the real free credit report, How to dispute credit bureau errors

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Updated: 11-22-2017