Sally Herigstad is a certified public accountant and the author of “Help! I Can’t Pay My Bills: Surviving a Financial Crisis” (St. Martin’s Press, 2006). She writes “To Her Credit,” a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.
My 13-year-old daughter opened a credit card in her name, but used a different birth year. I only found out due to the fact that she used my email for the account. She had been checking my email and deleting any correspondence from the company. She got one card with a $500 limit, and another card was on the way.
She didn’t realize the severity of her actions. She’s pretty much punishing herself. We are going to pay the $500 balance off and then she is going to work off that debt to us.
My questions are: What kind of criminal charges could she face? Is the credit card company going to press charges? Will they just cancel the account when I pay it off in a few days? I really don’t want to see her get in serious trouble with the law. She is well aware of the act and how serious it is now – Carolyn
Credit card companies cannot issue credit cards to anyone under age 18. They can issue cards young adults 18-20 years of age, but under certain restrictions.
Unfortunately, there’s little in the system to stop applicants from simply entering a fraudulent birth date and getting a card anyway. It’s a curious quirk of the credit reporting system that it’s so easy to do.
A credit report shows a person’s birth date, along with his or her Social Security number and other identifying information. According to the website of the Federal Reserve, however, the credit bureaus get birth dates and other information from creditors, such as banks or credit card issuers. That creates a circular information loop – the credit card company reports the date of birth entered on loan applications to the credit bureaus. That birth date is now reported back to potential lenders as if it is correct.
The Federal Reserve notes that credit bureaus also get information about you from public records, such as property or court records, and that each credit bureau may get information from different sources. Depending on where they pick up the information, the three major credit bureaus may not all show the same birth date for the same individual.
I would suggest you both sit down and pull her free credit reports once she turns 18 at annualcreditreport.com. Check to see if the incorrect birthdate is listed there. If it is, then she can submit a dispute to have it corrected.
From your story, it sounds as if the credit card company is still unaware of your daughter’s true age and is not likely to find out unless there is a problem. The primary interest of credit card companies is that they get paid. As long as they do, they have no reason to even look into it.
That doesn’t mean it’s fine for her to keep using the card she obtained using a false birth year, of course. It does mean that if you pay the card close it, and impress upon her the importance of never trying such a stunt again, you probably won’t hear any more about it.
The chances of a young person being pursued for fraud in such a case would be greater if the amount were higher. If she had charged $50,000 instead of $500, the consequences could be severe if the debt went unpaid.
You’re doing the right thing paying the debt and having your daughter pay you back. First, by paying the credit card company, you’re showing the daughter the importance of financial integrity. Yes, you could argue to the credit card company that as a minor, she isn’t responsible for her charges. But she did spend the money, and she received goods and services for it. Five hundred dollars is not an impossible amount to pay back, and letting her work to pay you back should be a valuable lesson she won’t soon forget.
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