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.
Dear Opening Credits,
My daughter received a credit card in the mail. She now has over 10. She pays on the balances, and we have recently paid them off. Can she be charged with criminal conduct? She is just 16, has a job and is very responsible, and I intend to let her keep them until her 18th birthday. Can I be in trouble for knowing about them? Should I cancel them all? — Ronee
Wait, back up. Your underage daughter has been opening fraudulent lines of credit — with your knowledge — and charging on them? Since you asked about potential criminal conduct, I’ll presume that you were not a willing co-signer on the accounts, but that she instead lied in some way to get them. With nearly a dozen credit cards in her name (well, in someone’s name) by the tender age of 16, I wonder when she actually began this life of crime.
Exactly how she acquired the cards is unclear, but I’m guessing it was in one of two ways:
- Not realizing her age, a credit issuer solicited her for an account and sent her an application. She completed the paperwork, pretending to be at least 18. Based on the erroneous information, the lender granted her a line of credit and she began to charge — relatively well, apparently. Other credit issuers soon followed suit.
- She stole another person’s established personal finance and identification data, used it to open accounts in her name and had the cards sent to her address. It could have been as easy as accessing credit solicitations meant for someone else or as complicated as inventing an entirely new persona with someone’s Social Security number.
In either case, both practices are indeed illegal. The latter, however, is the more serious offense.
As I am not an attorney, I took the matter to Los Angeles defense lawyer Justin Sanders and asked about your predicament. His response is hardly surprising: “If her daughter supplied false information in connection with the credit card applications, she could face potential criminal charges for fraud or identity theft, depending on the circumstances and the information supplied.”
So, Ronee, can you be charged with a crime as well? According to Sanders, the answer is yes. You could face criminal liability for aiding and abetting after the fact. He does go on to say, though, that “neither the mother nor the daughter is likely to face criminal charges unless she used someone else’s identity to get the cards.”
What really concerns me, Ronee, is that you feel your child is a responsible person. She may have repaid what she borrowed on the accounts on time and in full, but the method by which she got the cards in the first place is reckless and proves her to be anything but trustworthy.
Equally disturbing is that you are fine with her keeping the credit cards she got deceitfully. Your daughter’s actions put her, and possibly you, in legal hot water. And if she committed identity theft, she harmed an innocent person. The cornerstones of wise credit and financial management are honesty and integrity. By allowing her to maintain these credit accounts, you are essentially approving her illegal activity and giving her the green light to cheat to get what she wants.
So what should you do now? If your daughter got the cards by falsifying her age, have her cut them up and formally close the accounts. I also suggest she informs the creditors that the information she initially provided was phony. If she pilfered someone’s personal and financial identification, she — and you — should come clean to the affected party and notify the authorities. It’s the right thing to do. (Consulting a legal professional at this point is also a very good idea.)
After your daughter makes amends for her transgressions and has reached the grand, old age of 18, she is free to re-enter the world of credit: this time, honestly and legally.
See related:Minor’s credit card contract raises legal, ethical questions, Protecting your child from identity theft, Step-by-step guide to checking your minor child’s credit, Encourage your kids to learn good savings habits, Who’s liable for underage credit card debt?
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