Steps to fight fraud, repair credit damage caused by ex-spouse

To Her Credit with Sally Herigstad

Sally Herigstad is a certified public accountant and the author of “Help! I Can't Pay My Bills: Surviving a Financial Crisis.” She writes “To Her Credit,” a weekly reader Q&A column about issues involving women and credit, for CreditCards.com. She also has written for MSN Money and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

Ask Sally a question, or see if your question has already been answered in the To Her Credit answer archive.

During our marriage, I paid all household bills from my husband's bank account. Now that he's left me, he closed the account and claimed fraud, resulting in bills being kicked back, ruining my credit. How can I fix this?

Your husband’s actions have damaged your standing with your creditors and put you in fear of being charged with fraud. Your recourse? Divorce court. The damages your husband caused by falsely accusing you of bank fraud, including late fees, should be factored in to your divorce settlement.

Expert Q&A

Check out all the answers from our credit card experts.

Dear To Her Credit,
When we were still together, my husband always had me pay all household bills, including credit cards, catalog accounts, cellphones and so on from his Wells Fargo individual bank account.

He also had his paycheck direct deposited into this account, and I also made small deposits to the account from my earnings. I have had permission to use this account and the debit card since 2015. I have text messages proving he gave me information so I could.

My husband recently left. He contacted his bank and claimed fraud and the bank closed his account and reopened a new account for him.

When he claimed fraud, they back charged payments I had made, the same way I had been making them for years. My credit card that was in good standing has now been closed due to $700 in chargebacks. My cellphone has been shut off with a negative balance of $200, when it had always been paid online automatically through this account.

What are my rights now that he has damaged my credit and is falsely claiming fraud?  – Michelle

Dear Michelle,
What a mess! It sounds like your husband is out to make trouble for you – and he has succeeded so far. You have recourse, however.

Your most serious problem is that your husband is accusing you of fraud. You didn’t say whether you had been contacted by investigators or charged. If that happens, you must take it seriously and defend yourself. You will need to get local, qualified legal assistance to avoid legal repercussions.

Seek legal help

When you defend yourself, you seem to have at least three points on your side. First, you were married when you used the account. Spouses often let each other use bank accounts. While a spouse can be charged for using the other spouse’s bank account, it’s not the same as if someone from outside the marriage did the same. There is more of an assumption that spouses are often given permission to use each other’s accounts.

Second, you actually had permission to use the account. Be sure to find all text messages that prove you did, and make notes of what he said and when. If he gave you access to paper checks, debit cards and PINs, the access itself can be evidence of authorization.

Third, the fact you have been using this account to pay all the household bills shows a pattern, or a “course of dealing.” By allowing, even expecting, you to pay bills, he showed that you were authorized to use the account. A reasonable person, or the bank, would assume the authorization continued unless there is evidence of a revocation.

See related: 5 ways an ex can ruin your credit during breakup, divorce

Besides putting you in fear of being charged with fraud, your husband’s actions have damaged your standing with your creditors and left you apparently without enough money to pay bills. Your recourse in this situation is through the divorce courts.

While the divorce is still pending, your legal counsel may be able to request support for you through the courts. In addition, the damages your husband caused by falsely accusing you of bank fraud, including late fees, should be factored in to your divorce settlement.

Take quick action to repair your credit

As for your credit, it looks like you’ve got some repair work ahead of you.

Your first step, if you can afford it, is to catch up on your cellphone bill and get service reinstated before it's reported to collections. Then call your credit card company, explain what happened, and create a repayment plan to pay off that debt.

In the meantime, you should apply for a new credit card for which you can qualify to help add positive information to your credit reports.

If your credit is now in the tank, consider applying for a secured card, which will require a security deposit, and charge a small amount to that card every month and pay off the balance when due. To find out which cards you can qualify for, use CreditCards.com’s CardMatch tool.

I can’t overstress how important it is for you to get qualified, local legal help. A good attorney at such a crucial time can make a huge difference in your life, for years to come.

If you get the help you need and deserve, you can survive the tough times. Best of luck as you begin your new, independent financial life on your own.


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Updated: 09-21-2018