What to Do when a Family Member Steals your Identity

When a stranger commits theft against us, we want the thief to see justice. Strangely, when a friend or family member is the identity thief, people want to fix it without involving the police!

I hear variations on this story all the time:

"I tried to buy a car recently, but when the dealership pulled my credit report, they denied me because I had a lot of outstanding debt and credit cards which were behind on payments. I'm 20 and have never had a credit card or debt in my life! A closer look revealed that my dad has been using my information to take out loans in my name for years. I know this is illegal, but I don't want to send my dad to prison. How do I fix this without getting my dad in trouble?"

Of course, the details vary from story to story. Maybe the victim became aware of the fraud by checking their credit report.  Maybe they got a call from a collector for a credit card they never had.

Unfortunately, you have a choice between fixing this, or shielding your criminal parent from the law. No one is going to let you off the hook for these debts unless the foul play is revealed.

Here are your choices:

1. File a police report, and have a chance at fixing your credit.

Your family member will have to face the music, but this is the best option for you, and for justice. The credit bureaus and lenders will work with you to clear this up, and once there is a police report it is very likely that you won't owe any of the fraudulent loans.

If your family accuses you of "ruining the relationship", please remember: this is not your fault. You did nothing wrong. All of the shame and blame belongs on the thief.

2. Throw yourself under the bus to save the cheating family member.

This means that you agree that you are responsible for every single debt they have racked up in your name. You cannot go back on this and you cannot pick and choose. You will owe all the money.

Keep in mind that if you let them get away with it, they will be emboldened to do it again to other people. This also gets rid of evidence that may be useful if they are caught doing it to someone else, like your siblings.

Do you want to know where you'll end up if you take this route? In yet another heartbreaking thread about family identity theft, this reddit user wrote:

"My dad opened up tons of crap in my name. Said I was helping the family. He took my credit score to the high 400s by the time I was 20. I'm 32 now and just finally undid all the damage I let him do to my score. 12 years is a long time. I couldn't buy a car except at shady dealerships, I couldn't rent an apartment without my girlfriends Dad to cosign for me. Banks wouldn't loan me a dime and credit card companies would only allow me to have secured credit.Don't start your life like I did. You Dad is doing you no favors and if he gets mad at you he's being a selfish parent." 

3. Ask the family member to pay off the debts they racked up.

This won't save your credit score if you've already got delinquent payment marks on it. Those stay on for up to seven years and can affect your ability to buy a house or car, rent an apartment, and in some places even get a job.

I'm also going to guess that if the fraudster is living a lifestyle so far beyond his means that stealing from his kids is required to support it, he's probably not able to pay you back, even if he wanted to.

Keep in mind that not only is it illegal to steal someone's identity to take out loans, but coercing them to accept it is financial abuse. Do not downplay this. This is not a normal thing to do, and it is not an OK thing to do to someone you love- or anyone, for that matter.

Only one of these options has any chance of working out well for you. You have to file a police report, and begin the process of getting your credit back to normal.

Step One: Freeze your Credit and Report Stolen Cards or Checks

Check on your credit cards, and make sure you know the whereabouts of every check in your checkbooks. If the fraudster has access to your credit cards, report those cards as stolen to the company they came from.

Then, freeze your credit so that no one can open new cards in your name. You'll need to freeze it with four companies:


Also place a freeze with ChexSystems. Chexsystems is a screener that banks use on customers who are opening new accounts. This will help prevent the fraudster from opening new accounts in your name.

Step Two: File an Identity Theft Affidavit with the FTC, and Police Report at the Police Station

You can file the identity theft affidavit online. Be sure to save:

  • Your Reference Number
  • A Copy of the Affidavit (print it! you need it for the police station.)

Then, go down to the police station. Here's what you need to bring with you:

If possible, get your Identity Theft Affidavit notarized. This means waiting to sign it until the notary has identified you. You will find notaries at most banks and financial institutions.

Together, the police report and affidavit make up your Identity Theft Report. This document will be the foundation of starting to repair your damaged finances.

Step Three: Check your Credit Report

Everyone is entitled to check their credit report once a year for free. Many channels try to sign you up for shady business or make you pay, but if you go through the official channel it is actually free.

Related: How and Why to Check your Credit Report

When you get the report, look for accounts that you did not open.

Step Four: Inform the IRS, if you need to.

If your tax information was stolen or you think that someone has been filing, or might file, taxes in your name, notify the IRS. The correct paperwork is Form 14309.

Step Five: Tighten Security.

Look at your security questions. How many of those are really answers that only you know?

Of course your mother is going to know your mother's maiden name.
Of course your brother is going to know the street on which you grew up.
Of course your best friend knows your childhood phone number.

Even if you trust these people, this is still bad news.

Most security questions suck, so set them to something bizarre. Your mother's maiden name? Cosmic Banana. The street on which you grew up? Captain Picard.

Just make sure that you remember these answers.

One of my favorite security questions is, "What's your anniversary?" I've never been married, so I imagine this question would baffle even those closest to me. But I'll never forget it. Who says it has to be a marriage anniversary? ;)

You can also call the bank and ask them to put a special password on your account, so that knowing your social security number and birthday are no longer enough.

Keep your Paper Info Safe:

Safe Deposit Box at Bank
Fireproof Safe at Home
Lockbox at Home

Locked Car (windows smash easily)
Your Wallet (Someone steals your wallet? All your important papers are gone!)

One Last Thing:

If you're digging out of the mess caused by identity theft, remember to document everything. Record calls if you can. Send information and correspondence by certified mail with return receipt required. Keep files for each creditor. Leave nothing to chance.

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