What to Do When a Family Member Steals Your Credit

It’s a precarious position when someone close to you steals your identity, particularly when it’s a family member. Not only could it drag down your credit score, it might also destroy your relationship with that person. It’s not like a stranger you’ve never met is making eBay purchases in a distant country.

You walk a fine line when addressing issues of this magnitude, especially if you want the individual to regain your trust. It’s a tough situation – especially if you ever hope to reconcile with the family member in question.

Known as “familiar fraud,” this type of identity theft is more common than you may realize. Family members make up 30% of all identity thieves. It’s only natural, when you think about it. After all, family members have the easiest access to your financial information, especially if they live with you and know your bank account and credit card information. All someone needs is your name and Social Security number to open an account online, sign a few papers with your signature, and they can commit identity theft.

If you have a hard time trusting with whomever you live, be sure to secure all of your account information. That means you shouldn’t leave your Social Security cards and checkbooks lying around. Put them in a lockbox or safe. Also make sure you are always logged out of any accounts on your computer- shared or otherwise- when you are finished managing your accounts online.

If it’s too late for preventative measures, you are left with a few options. However, before you choose what to do, you need to determine a few things.

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How Often? You need to figure out how many times this person has stolen your identity. Since they’ve already established they aren’t a very trustworthy individual, rather than asking them directly, you would be best to get your credit reports for each of the three major credit reporting agencies on your own. You can get your annual credit reports for free at AnnualCreditReport.com and you can monitor your free credit score, updated every 14 days, on Credit.com.

How Much? Once you obtain your credit reports, try to determine the total amount of money borrowed in your name. Once you know the basics, there are a few ways you might go about rectifying the situation, though in all likelihood, none of them will be particularly pleasant. You’ll ultimately have to decide what makes the most sense for you and your family, but here are a few options.

1. Work Out an Arrangement

One of the means of recovering your money and fixing your credit which involves simply asking for the person to pay you back. Confronting your family member directly could alleviate the situation immediately – if the family members admits to the fraud. Since, in all likelihood, they won’t be able to pay you back all at once, you might consider suggesting a payment plan. You might even want to charge them interest.

2. Make the Consequences Clear

If they don’t agree to pay you back, you can make them aware of some alternatives. Let them know if they aren’t willing to work with you, you may be forced to contact the authorities. This may be the end of the discussion and you could get the repayment plan you’re seeking right away. But that’s far from guaranteed. If you fear for your safety or that your identity thief still has access to your accounts and could perpetrate more fraud, you may want to skip to the last option.

3. Report the Crime

In the event that your family member refuses to pay back the debt, you can file a police report and alert the issuing bank(s) of the situation. Even if they can’t catch the thieves immediately, reporting the crime could help make a case against the thieves down the line.

You should also contact the banks and any other parties impacted by the fraud, disputing all fraudulent charges, and requesting that they be removed from your account. Next, you can contact all three credit bureaus to request that the items be removed from your credit report. You can include a copy of the police report when you file your dispute.