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.
My daughter-in-law is getting creditor calls about utility accounts set up when she was a minor by her now-deceased mother. Is she responsible for these debts?
Your daughter-in-law is an identity theft victim. Because she didn’t rack up the bills, she is not obligated to pay.
Dear Opening Credits,
My soon-to-be daughter-in-law’s mother put her electric and water bills in her daughter’s name when she was 17 because the mother could not get them with her credit. She passed away in December, and now my daughter-in-law is getting creditor calls. Is she responsible for this debt since she was a minor and did not know what was done? – Erin
Your daughter-in-law is not morally, financially or legally responsible for the debt incurred by her late mother. There are two major reasons for this. The first is that she is an identity theft victim. Because she didn’t rack up the bill, she is not obligated to pay. The other reason is that she was not an adult when the accounts were opened.
Even if she did initiate the utility service, the contracts would almost certainly be deemed invalid. Agreements such as these (as well as credit cards and loans) can only be entered into by adults. In most states, the minimum required age is 18, though it’s 19 in a few states.
Tip: Minors are generally not allowed to enter into any contracts, so if anyone fraudulently opens accounts using a minor’s identity, the minor is not responsible for any debt racked up on those accounts.
Here are the five steps that your daughter-in-law must take. To simplify, I’ll address them to her directly.
1. Make no attempt to pay.
Because you are now an adult, it is possible to validate a contract by agreeing to or sending payments to the creditor. Do not do this! No matter how persuasive the collector is, reject his proposal. This is not your debt. Remember that.
2. File a police report.
Contact your local police station. Explain that you were a victim of identity theft and want to file a report so you can dispute a fraudulent debt. The police may ask you to come in to the station to complete the paperwork or do it online, but if you are told you don’t need to file a report, politely insist that you do. That report number is essential to fixing this problem.
3. Get your credit reports.
Chances are the accounts are showing up on your credit reports. Pull all three (TransUnion, Equifax and Experian) from annualcreditreport.com so you can see how your accounts are being listed. Make copies and circle the fraudulent accounts.
4. Dispute the fraudulent accounts.
Write a letter to one of the credit reporting agencies, explaining that you are an identity theft victim and want erroneous line items removed.
Although you can use the agency’s online form, it’s better to do it by mail. By mail, you can offer plenty of evidence that the account is not valid. Detail what happened, your age when each utility service account was opened, the police report number for the case, and include a copy of your marked credit report. Send the package certified mail, return receipt requested.
The agency receiving your package will notify the others and the dispute process will be in effect. The credit bureaus have about 30 days to investigate. Assuming a credit bureau finds in your favor (which it should), those accounts will be removed from your credit reports.
5. Tell the collector to stop communicating with you.
While you are dealing with the credit reporting agency, the collector may still try to squeeze a payment out of you. Do not stay on the phone and chat. Clearly state that the bill is not yours, you are disputing it with the collection agencies, and to stop contacting you about it from this point forward.
If the collector persists, send a cease and desist letter, which is your right as under the Fair Debt Collection Practices Act. Upon receipt of that letter, the collector can either drop the matter or inform you of its intent to sue for damages. Since you are not the responsible party, taking you to court won’t make sense, but if you do receive a court summons, show up and present your case.
Now back to you, Erin. It’s wonderful you are helping your son’s fiancee in this way. With her mother’s passing, I can imagine she is grateful to have you looking after her well-being, especially with something as emotionally complicated as this sad situation.