Being victimized by identity theft is bad enough. But the sting is particularly harsh if you find out that the perpetrator is <b><a href="http://askthemoneycoach.com/2010/08/my-husband-has-a-motorcycle-loan-in-my-name-that-i-did-not-sign-for-i-have-knowledge-of-the-loan-but-did-not-sign-for-it-we-are-having-marital-problems-now-i-have-disputed-this-loan-with-equifax-an/" target=_blank>a family member who has used your name, social security number or credit</a><b> in order to obtain loans, make purchases, or initiate financial transactions without your authorization or consent.
Even worse is a family member who wrecks your credit by taking out utility bills or credit cards in your name and then fails to pay those bills. What should you do in such a sticky circumstance?
Read on for advice on how to handle this thorny, but unfortunately all-too-common, situation.—<b><em>Lynnette Khalfani-Cox, <a href="http://askthemoneycoach.com/" target=_blank>AsktheMoneyCoach.com</a></b></em>
<b>Tell the Truth</b>
Start by taking control of your finances and being honest about what is going on. You are the victim of <b><a href="http://www.blackenterprise.com/2011/10/11/3-reasons-you-should-consider-buying-identity-theft-insurance/">identity theft</a></b>, pure and simple. And it’s well past time you started letting others know that you did not authorize or open those credit or utility accounts and that you are not responsible for them, period. End of story.
At this point, you don’t necessarily have to disclose the identity of the identity thief and "turn in" the person. But if you decided to do so, you would be completely justified in your actions.
<b>Monitor Your Credit</b>
Next, begin monitoring your credit every month to make sure nothing else unexpected pops up there. Put a <b><a href="http://askthemoneycoach.com/2010/01/what-is-a-credit-freeze-and-how-can-i-use-one-to-protect-my-credit/" target=_blank>credit freeze</a></b> and a credit alert on your credit reports to prevent further damage from this person who has blatantly taken advantage of you.
<b>Confront the Culprit</b>
Lastly, you need to confront this person directly. It doesn’t matter if that person is a “close” family member. I don’t care if it’s your sister, a cousin—or even your mother. Let this individual know that they have totally crossed the line and damaged your finances and credit rating in a way that is completely unfair, disrespectful to you, and that has long-lasting implications. Tell the person that they have exactly one week to contact every creditor in which they used your name to close the account or cut off service in your name—and put it in their name.
<b>Issue an Ultimatum</b>
If that person’s credit is bad (which it likely is) and they can’t get credit, a phone, electric service or cable in their own name, that’s their issue to deal with; not yours. A week’s time is plenty of notice for them to take action. Tell them that if they don’t handle it in a week, you will be forced to contact those creditors and utilities directly and advise them of the situation – including divulging their identity. Hopefully, you will be stern and straightforward enough in your approach to this person that he/she will know that you mean business.
At this point, I’m still not saying that you have to turn the person in (although they do deserve it). But neither should you be held continually responsible for someone else’s financial mess.
If the person doesn’t act quickly, and follow through as you’ve told them to do, don’t hesitate to get those services cut off. If push comes to shove, and you have to tell creditors or even the authorities who the culprit is, I would go ahead and do it. Why would you go through unwarranted financial stress for such a person when clearly they’ve shown you absolutely no personal or financial consideration whatsoever?
It’s a shame when a relative uses another family member’s credit and then ruins that credit. In some families, that would be cause to get "cut off"—perhaps for life. For many people, though, completely cutting a relative or close friend out of your life forever would be too difficult and emotionally painful.
A word to the wise, though: Even if you still love the person who did you wrong and want to maintain the relationship, you should never stand for being anyone’s financial doormat.
<b><em>Check daily for Lynnette Khalfani-Cox's Ask the Money Coach column on BlackEnterprise.com</em></b>