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The www.FedPrimeRate.com Personal Finance Blog and Magazine

Saturday, August 23, 2008

When A Family Member Commits Identity Theft

I applied for and received my first credit card in college. I had no credit history, so I had a clean slate to start with. Soon after, pre-approved credit card offers started arriving at my apartment and my parent's house. The temptation was too much for my mom. She applied for and received two credit cards in my name. I first suspected that something was up when an envelope addressed to me arrived in the mail, but she refused to let me see it. Even though I had a nagging suspicion and a bad feeling, I chose to ignore them. She was my mom, after all. I didn't think she would ever do anything malicious to me.

After I graduated, I noticed statements arriving at the house for credit cards I didn't have. I opened one and discovered it had a $6000 balance. I didn't want to say anything, and I didn't. I still wanted to believe that my mom would never do anything to hurt me, but eventually, I did ask when the balance continued rising. She told me she was building my credit for me. I was young and had no practical knowledge about finances, so I accepted her excuse, even though the idea still felt wrong.

About five years later, my mom quit her job to open an antique store. She needed money to purchase inventory, rent a building and pay start-up fees. She borrowed against her retirement fund, and when that was tapped out, she cashed checks from credit card companies. I should rephrase that: she cashed checks from my credit card companies. I remained blissfully unaware until I noticed my statements no longer arrived in the mail, and when I called the bank, my balance had doubled. My mom tearfully admitted she had made charges on my card. She promised to pay me back and never do it again. I believed her until my balanced tripled and then finally maxed out. My mother never gave me any money towards her charges, even when confronted. I paid off the balance over the course of five years, totally unaware of the total impact my mom had made on my credit.

Those credit cards she had taken out when I was in college returned to haunt me, and still haunt me, long after I thought they had been cancelled. After maxing out the credit limits, she defaulted on them. They were sent to collection agencies, and the collection agencies came after me.

I had become much more financially savvy, and after my mom had stolen checks and statements from me, I switched my mail to a post office box so she no longer had access to them. The first letter from a collection agency arrived at my box announcing I had 30 days to pay a balance of $7000 or I would be prosecuted. I pulled my credit report and did some research. Then I wrote a carefully worded letter based on ones I'd seen on the ID Theft Center website. That collection agency never contacted me again, and the collection account and all things associated with it were removed from my credit report. According to my credit report, another default card was still out, and I took action to get it removed as well. I wrote letters and disputed the account on the credit report. I wasn't so lucky this time.

Since I lived with my parents, the majority of my mail arrived there, including letters related to that other card. It had a massive balance, and with interest and past due charges, the bank wanted almost $30,000. I knew about the card, and I took as much action as I could without filing a police report.

I never saw letters from the creditors. My mom accepted the summons to appear in court. I never saw that either. I knew nothing about the extensive court proceedings, or my mom's involvement, until I stumbled upon some court records at work. I could only stare in disbelief, not really certain what to do. The court had tried and failed to contact me, and they were about to garnish my wages. I chose not to confront my mother. Instead, I called a legal assistance program offered by my employer. They put me in touch with an attorney who agreed to take on the case and find out what had happened. I was left with the unpleasant task of talking to my mother.

She couldn't understand how I had found out. She had gone to great lengths to keep me in the dark about the whole mess. She had intercepted all letters she could. She had spoken to the sheriff when he came to the house, assuring him I had nothing of value. She had appeared in court in my name, but the day the judgment was rendered she had been unable to appear because of a doctor's appointment. She tried to call the court, but they refused to cancel or move the court date. She swore she never thought the case would result in a judgment. She hired an attorney to try to clear up the situation. The best the attorney could offer was to have me sign over all of my assets and accounts to my mom so I truly owned nothing. At this point, I knew more about finances, and I had no intention of signing anything over to the woman who had created the entire mess. Instead, I took the case back to court.

My attorney gave me copies of the court records where my mom had signed my name. He recommended I find a new place to live, and he advised against signing anything over to my mother. I had never filed a police report, because I didn't want to send my mom to jail. The rest of my family urged me to settle the whole situation out of court, set up a payment plan and just pay off the balance. I had already paid off one balance, and I didn't intend to pay this one. My attorney wanted my mom to sign an affidavit admitting her guilt, but when I asked her she informed me that she did not want to be saddled with the $30,000 worth of debt. I let the case go to trial.

Part of the process involved filing a fraud report with the creditor. I listed my mom as the thief who stole my identity. The creditor withdrew the case and the judgment was thrown out, but it remains on my credit report. It will be there for another five years. It affects everything I try to do. When I bought my house, I had to provide copies of court records. I cannot get new credit cards, and any loans automatically have a higher interest rate. Even though the nightmare has passed, its effects have not.

Financial ghosts of the mess will probably stick around to haunt me for years to come. I have developed phobias related to debt and money. I feel guilty for spending money and worry constantly about debt, even though my monthly income is more than enough to live comfortably. I cannot trust my family's advice related to financial matters. When I look at my mom, I have a slow, seething anger towards her that I'm not sure will ever go away. I feel obligated to love her, when in reality I want nothing to do with her. I resisted turning the theft over to the police, but if this same situation were to happen again, I wouldn't hesitate. I wouldn't let family ties stand in the way of justice.

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