When Identity Theft Hits Close to Home

Imagine if when you were a child, one of your parents opened a few credit cards and acquired a few utilities in your name–unbeknownst to you. Years later, it comes back to haunt you when you’re denied financing from a used car dealership. The salesman explains that your credit is poor because of unpaid bills–bills that your parent racked up in your name and never paid. As a result, lawyers, bill collectors, and a warrant may be in store for you as well as the daunting task of repairing your credit and getting your identity back.

Identity theft isn’t always committed by some unknown thief. It’s sometimes committed by a trusted brother, sister, mom, or dad–someone who has easy access to your Social Security number and personal information. Often, the children don’t find out about the offense until years later. But what can you do? Below is a step-by-step guide on how to handle this situation.

1. File a police report.
The first thing you need to do is file a police report and fill out affidavits to help prove to creditors that you did

not rack up the charges, says Sonya Smith-Valentine, a lawyer who specializes in identity theft and credit fraud. Proving your innocence is a case-by-case basis. “If you were in school and the charges were made in a different state, show it. Provide your class schedule and other information to prove that you were out of state attending school,” says Smith-Valentine.

When you file a police report and identity theft affidavit, understand what it means. “You’re going to have to say you’re willing to assist in the prosecution of the family member,” says Smith-Valentine. This can often be a tough decision, but it’s important to put emotions aside and ignore excuses that are often offered by the identity thief.

2. Close the account.
Cut off the line of credit immediately. Often, when this type of offense is committed by a family member, we allow them to placate us with “I’m going to pay you back,” or “Don’t worry about it, it’s going to be paid off.” But you must be proactive and salvage what you can of your credit before it gets any further out of hand. It would also be a good idea to place a fraud alert on your credit report.

3. Call–and write–the creditors.
The next thing you need to do is contact the creditors “you” owe, says Smith-Valentine, who represented a client who went through a similar situation as the example above. He was able to show the companies his birth certificate, proving that he was a minor when the transactions occurred, showing that he could not have possibly made the purchases.

It is important to write the creditors and not just call, says founder and president of Identity Theft Resource Center, Linda Foley. If you know a family member made the purchases, you will need a police report to be taken seriously. Send the police report, the list of fraudulent purchases, and a copy of your birth certificate to verify that you were a minor when these took place (and could not have even opened the account). You should also send a copy of the letter to each of the three major credit reporting agencies–Experian, Equifax, and TransUnion. Also keep copies of all the letters you send, and ask

them to block the fraudulent information per Fair Credit Reporting Act Section 605b. All mail should be sent registered, certified mail with a return receipt requested. Make sure you also keep a record of all calls.

4. Go to the top.
If the initial letter and phone call to customer service yield no results, go to the top. “Spend a little time doing a quick Google search to find the office of the president,” says Smith-Valentine. Send another letter via certified mail, and include a copy of the initial letter you sent to customer service. If you can, include even more information about the problem you are trying to resolve.

5. Contact the appropriate regulator.
You need to determine which federal agency regulates the financial institution or creditor that is holding you responsible for repayment. If it’s a bank, chances are it is regulated by the Office of the Comptroller of the Currency (www.occ.treas.gov ) or the Federal Deposit Insurance Corp. (www.fdic.gov). You can file a complaint on the agency’s Website. To figure out the agency you need to turn to, go to www.helpwithmybank.gov.

6. If all else fails, call a lawyer.

If you’ve written the creditor, called their customer service department, and contacted the company’s headquarters and little to nothing has been done, it may be time for you to seek legal counsel. Smith-Valentine says that if it comes to this point, you’re usually suing the creditors and not your relative. “The way the laws are set up, they’re geared toward the company that was sending the wrong information,” explains Smith-Valentine. “If you notified the credit card company that you did not make the purchases and they remove the fraudulent charges from your account, the company has a right to go after the person that was making the purchases, according to the Fair Credit Reporting Act. The claim against the thief to recoup the money do es not belong to you. If the creditor reports the fraudulent charges on your credit report and you dispute the reporting without success, this gives a lawyer grounds to sue the creditors on your behalf.”

Additional reporting by Sheiresa Ngo.

This article originally appeared in the May 2010 issue of Black Enterprise magazine.