By Quentin Fottrell, MarketWatch
MarketWatch is revisiting some favorite Moneyologist dilemmas for Mother’s Day on May 14.
I have a very serious problem, and I’m not really sure how to handle it. Several months ago, I found out that my mother has been using my credit to open accounts since I was 9 or 10 years old. I’ve found out about 10 or more accounts so far with up to $5,000 in debts. They’re all delinquent/unpaid and affecting my credit negatively.
Everything that I’ve done on my accounts is good — on-time payments, not keeping high balances, paying things off, etc. — I’ve called all of these creditors and explained the situation and requested that they remove these accounts from my credit. I’ve also contacted all three major credit bureaus and requested the same.
Now, my husband and I are trying to apply for a mortgage on a house, and we can’t get one because of these items remain on my credit history. I don’t know what to do. I don’t want to get my mom in trouble because I know that identity theft is a crime, but I don’t want this to continue affecting my life, my husband’s life, and my future children’s lives.
How do I handle something like this? Is there a way to get these things that you haven’t done off of your credit report without getting your family member in trouble? I know that she’s no longer doing this, and she’s apologized but, to be honest, it does not really feel like enough. What can I do?
If it was $5,000 in total, there is more reason to deal with this privately. If it was up to $5,000 in 10 separate accounts, you have little choice but to report the money stolen in your name to the police in an effort to restore your credit rating. I recently received a letter from a woman whose mother-in-law had stolen $50,000 in her name and I recommended the reader report the crime.
The credit bureaus won’t remove this from your account unless you report it as theft. You can’t have it both ways. If you (or your mother) can repay the money, be prepared to wait to buy a house and to possibly face higher interest on any loan in the interim period. If you want to restore your credit and ensure that you are not liable for these loans, you must report this credit card fraud to the police, and alert the credit card bureaus. As I told a previous letter writer who had a similar problem: “People who commit fraud are not dressed in black body stockings like pantomime villains. They look like nice people. They’re sitting next to you, flipping through the latest John Grisham and sipping a latte in Starbucks. They might even like to knit sweaters for their grandchildren and play bridge.”
The credit bureaus won’t remove this from your account unless you report it as theft. You can’t have it both ways.
Consult a lawyer as the laws on credit card fraud and identity theft vary by state, but in a worst-case scenario your mother is likely to face a fine and community service for a first offense, says Axton Betz-Hamilton, assistant professor of consumer studies at Eastern Illinois University. “As children, it’s natural to want to protect our parents,” she says. “In the eyes of creditors and credit reporting agencies, if you don’t file a police report, you are not considered a victim by creditors, banks and credit reporting agencies. If you choose not to report, it’s assumed that those debts are yours and you are responsible for them.”
Betz-Hamilton should know. Her late mother stole her identity from the age of 19 to rack up approximately $500,000 in credit card debt in her name. She confided in her mother and even attended a ceremony with her daughter when Betz-Hamilton received an award for her work on child identity theft. You can read her story here. It’s a chilling story of betrayal where her mother sowed seeds of doubt about relatives and friends as the possible culprits. If your mother did this once, she could do it again, especially if you allow her to get away with it. The alterative: Ask her to pay it off, and build your credit score again from scratch.
The nature of credit card fraud is changing as improvements are made to credit card security. As EMV chip technology becomes more ubiquitous, fraud at physical storefronts becomes very different, “driving a movement from counterfeit card fraud to new account fraud,” according to Javelin Research, a financial consultant in Pleasanton, Calif. When it comes to family, you need to weigh the amount involved and the consequences of reporting — and not reporting — it. But know that if your mother has been doing this since you were 9 years of age, she is more likely than not to do it again.
Do you have questions about inheritance, tipping, weddings, family feuds, friends or any tricky issues relating to manners and money? Send them to MarketWatch’s Moneyologist and please include the state where you live (no full names will be used).
Would you like to sign up to an email alert when a new Moneyologist column has been published? If so, click on <INTERNAL-PAGE URL="/tools/alerts/newsColumn.asp">this link.</INTERNAL-PAGE>
Hello there, MarketWatchers. Check out the Moneyologist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas: inheritance, wills, divorce, tipping, gifting. I often talk to lawyers, accountants, financial advisers and other experts, in addition to offering my own thoughts. I receive more letters than I could ever answer, so I’ll be bringing all of that guidance — including some you might not see in these columns — to this group. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyologist columns.