Recently in the Get Rich Slowly discussion forums, SouthernGent posted a perplexing problem. Here’s his story:

My wife and I have been debt-free for over three years now, meaning no credit card debt and only our mortgage. When I ran our credit report the other day (which I do annually), I noticed three cards under my wife’s name with balances of $2,000, $3,000, and $12,000. This shocked and worried me for obvious reasons.

My wife said she did not open them, so she asked her mom and sister. They admitted to opening the balances under my wife’s name! My wife was still receiving credit card offers at her mom’s house, so they took advantage of the offers and of my wife’s excellent credit.

They have been making payments and have never been late. (Yet.) We want them out of my wife’s name ASAP, but therein lies the issue. They can’t open any credit cards in order to transfer the balances into their names, plus my wife thinks if I report this as fraud/stolen ID, they will go to jail. She doesn’t want this to happen due to our four year old niece.

I really want to get this resolved, but am at a loss how to handle it. (They also really need financial advice/counseling, but that can wait.)

Stories like this highlight the need to check your credit report regularly. You are legally entitled to receive one free report from each of the three credit bureaus every year. You can obtain your free credit report from AnnualCreditReport.com.

By checking his credit report, SouthernGent was able to catch suspicious activity. But what does he do now? If this had been a random stranger stealing his wife’s credit, the answer would be obvious. But the fact that the identity theft was committed by family members adds a nasty wrinkle.

During the discussion in the forum, Googoo pointed to an article at the Identity Theft Resource Center. “When You Personally Know the Identity Thief” explains the options, addresses frequently asked questions, and provides some letters for addressing the situation. From the introduction:

Identity theft is a complex crime at best.   When the impostor is someone known to you, the impact of the crime magnifies dramatically. How do I prosecute my own mother? What kind of father would I be if I allowed the police to arrest my son? Should I practice “tough love?” What will the other family members think of me? What will my friends say?

You  basically have three choices:

  • Proceed as if this was a regular case of id theft:
    • Make a police report (this is not the same as pressing charges against the person).
    • Cooperate with law enforcement’s investigation.
  • Working with the creditors to see if a resolution can be made without police involvement.
  • Paying the debt and living with the consequences.

This guide will address some of these choices and possible solutions.

Have you had your identity stolen before? By a family member or a friend? How did you handle it? Would you do anything differently if it happened again? Do you have any advice for SouthernGent?

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