When Family Members Steal

The following is a guest post by Jack Busch from MasterYourCard.

It’s a sad fact: family members and friends are some of the most common perpetrators of identity theft and fraud. Residents of your household have easy access to all your personal information - they can easily log in to the family computer or open the filing cabinet in the office. In cases where checks go missing, inexplicable bills appear on statements and seemingly unprompted late notices show up in the mailbox, someone from the household is often to blame. The emotional hurt from this type of incident can be equally as painful as the fiscal repercussions. Because of this, many are hesitant to confront the problem – and with good reason. Here are a few things to consider if you suspect one of your family members or friends is stealing from you.

It’s Time to Re-Evaluate Your Trust

When bill collectors come calling and you swear you never opened the account in question, you’d better make sure you know the score before fighting back. While lenders sometimes get things wrong, the more likely scenario is that someone has opened an account under your name without you knowing it. Before you escalate to the FTC or refuse to pay, take time to investigate when the account was opened and consider whether someone in your household has been using your identity.

This can be difficult. As a family, it’s easy to love each other unconditionally – but that doesn’t mean you should trust someone unconditionally. Wishful thinking makes us want to give our family members the benefit of the doubt. But unseen circumstances for our loved ones – such as runaway debt, drug addiction or entanglement with organized crime – may drive them to compromise their morals. Oftentimes family members intend to “pay you back” as slyly as they “borrowed” from you or justify their actions in other ways. Other times they are simply too ashamed to ask for help. In any case, you need to confront them directly and respectfully. The best approach depends on your relationship with them. Afterwards, take measures to prevent it from happening again, in spite of how profusely they apologize or promise it won’t happen again. Invest in a safe. Change your passwords. And monitor your accounts closely.

Work on Undoing the Damage

There are three fronts to this task: emotional, fiscal and credit. Repairing the first breach is completely up to you and your loved one and should begin with a frank heart-to-heart. As part of this discussion, you should put together a plan to control the damage to your credit rating and to reconcile the money that was stolen.

No matter what you decide, you should close out fraudulently opened accounts immediately as well as pay for any delinquent items. If checks were stolen, contact your bank’s check verification agency and alert them of the check numbers that were compromised and should be considered void.

As for debt that was accrued in your name, it will have to be paid. Given that your family member was driven to stealing in the first place, you’ll likely have to settle these debts out of your own pocket. After that, you can either forgive the debt owed by your family member to you or work out a repayment plan between the two of you.

If discussion with your loved one breaks down, you’ll be faced with another stark reality…

You’re Going to Have to Press Charges

Businesses and credit reporting agencies require police reports or a valid identity theft report in order to address fraudulently opened accounts and negative items on your credit history. That means that in order to save your credit rating, you are going to have to press charges against your friend or loved one. Furthermore, most lenders and credit reporting agencies require an identity theft claim in order to prevent further fraudulent activity. This, of course, is a last resort, but a necessary measure if you want to clear your name. If you are unwilling to take legal action against your loved one, then you are giving tacit approval for their activity, which, in essence, no longer makes it fraudulent.

During your discussion with your family member or friend, be sure to let them know that you will have to press charges in order to salvage your credit rating. This is by no token “selling them out” as, if they respected for and cared about you, they would willingly work with you to close the accounts and repay the debts. Things can get ugly at this stage, but without addressing the problem, it will only get worse.

Confronting a loved one who is stealing from you is a delicate situation that rarely has a satisfying outcome. While the course of action in the eyes of your lenders, the credit reporting bureaus and the law is clear, preserving your relationship and rebuilding trust is a difficult and unique undertaking for each instance. The key is to remain open, be understanding but to stay firm. To prepare yourself, you may wish to read some of the following:

• Oprah’s Guide to Confronting Your Toxic Relationships

• The FTC’s Guide to Identity Theft

• Identity Theft Resource Center (ITRC): Fact Sheet 115 When You Personally Know the Identity Thief – Includes letters to rectify accounts with lenders and to solidify personal agreements

• ITRC: Identity Theft and the Deceased

Comments

[Sarah]

If a person going through my garbage stole my identity and made unauthorized purchases, I wouldn't feel responsible for paying for those charges. Why should I feel responsible if someone in my household stole from me?

[Sarah]

Oh, P.S.: filing an identity theft report does not mean that you have to press criminal charges.

[Jim]

I don't know if you necessarily have to press charges to file a claim. I think it may depend on the nature of the identity theft. I've had fraudulent charges on a credit card and the credit card company removed it without much incident or argument. Another time an ex-roommate tried to use my card and I think I filed an affidavit about it but I didn't explicitly press any charges But if someone took out a card in my name, ran up bills, and trashed my credit then it may take a lot more.

Personally I'm not going to throw a loved one in jail because of one incident over some money. Sure they lose my trust and it is bad but pressing criminal charges for one mistake is going too far. I would however let them know that a 2nd time would result in me pressing charges.

[David@DINKS Finance]

Pretty sure you need to take a hard stance on this. The family member (or friend) should be confronted, and if they do not fully compensate you within a week it's time to take further action.

I can't see a relationship surviving this, but that's just me.

[Jack @ Master Your Card]

Thanks for your comments - you are right, you don't have to press charges in every case of identity theft. However, filing a police report may lead to an investigation and when asked by authorities, you are somewhat obligated to speak candidly - something that can land your loved one in hot water.

But as Jim pointed out, it's not often worth the time of a lender or a police department to launch an investigation.

[Lee]

There's no way I'd pay for debt taken out fraudulently in my name, irrespective of who was responsible. Fraud is fraud, and I'm not liable for it.

That said, I'm in the UK so our laws might be a touch different?

[Lawrence]

I've had this problem in the past and it caused me tons of credit issues.

[Lis @ Ace Cash Express]

Having a family member that steals from you is a sign of lack of communication. If I'm the head of the family and I sensed that there's something wrong with my credit cards, I'll try to talk to all the members about the issue. In the first place, I should know most of my family members stuff. Is there a sign of your son's sudden change in behavior? Maybe you should investigate about it. Perhaps the reason is a new vice or some other kinds of behavior-affecting problem. It will be solved I think if a family always collaborate on things...

[Marie]

I have experienced minor and major theft from my adult children. I wonder how common this is. No other way to handle it than to forgive but not quite forget.