If someone, such as parent, spouse or any other family member uses someone else’s personal information to open an account without that person’s knowledge, it is considered fraud and identity theft, the same as if perpetrated by a stranger.
While the emotional aspect can get complicated due to the betrayal of trust, the reality is a financial crime has been committed and should be treated the same as though it was committed by a stranger.
Steps should be taken not only to bring the culprit to justice, but more importantly to repair the consequent damages to your credit report, which is most likely.
In some cases however, a parent or spouse may open a credit card in your name under legitimate reasons and with your cooperation, such as helping a child to begin establishing credit.
What to do if someone applies for a credit card in your name
If you notice a new account on your report that you did not open, you should immediately report it to the credit card company from where the fraudulent account was opened.
This includes other accounts other than credit cards, such as disaster loans applied through the U.S. Small Business Administration’s Office of Disaster Assistance.
Immediately contact the card issuer and block the card
Alert them that your identification has been stolen. The card issuer will assist in next steps and will likely advise you to immediately file a police report.
They will need this to remove fraudulent activity from the account. If they don’t, you will to file a dispute with them.
You may be able to request another review if the original dispute is denied.
It is also important to change all of your online passwords for your credit cards, bank, and investment accounts.
File report with the police department
Go online or call to determine how this is handled. Share the situation and ask for assistance in how to proceed.
Next, officially report the crime to the police as this will help solidify your case in restoring your credit report with the credit bureaus.
Cooperate fully with any police investigation that follows.
Contact the Credit Reporting Agencies
Contact Experian, Transunion, Equifax online or by phone. Explain that your identity has been stolen, and you would like to place a freeze on your credit account.
A freeze prevents unauthorized activity from continuing, by ceasing access to your credit report. Each bureau will assist you on how to proceed.
The freeze will avoid further damage to your credit, and will have no negative impact on your credit score once in place.
As per the Fair Credit Billing Act, you can be held liable for no more than $50 of fraudulent charges on each credit card.
Keep in mind though that falsely disputing legitimate credit card charges may land you in trouble.
You may also report the fraud to the Federal Trade Commission through their online form.
Is opening a credit card in someone else’s name a felony?
Opening a credit card using someone else’s information is not always a felony. Sometimes it’s a misdemeanor. However, it’s always considered illegal.
Whether doing so is considered a felony depends on the laws of the state in which it occurs and how much of the victim’s money is spent.
Cases are judged and punished on an individual basis taking these factors in account.
In fact, you can visit a particular state’s government website to consult their penal code for a better idea of their laws and possible sentences.
Depending on the severity of the crime committed, punishments for this kind of identity theft can range from fines and short jail sentences to longer incarcerations in a state or federal prison.
Parent opened credit card in my name
Some parents like the idea of opening a credit card in their child’s name in order to help kick start the process of building credit.
In this situation, a credit card is opened with the child’s full participation. However, while this might seem to be a reasonable idea, it is not advisable.
Applying for and receiving a new credit card is a legally binding contract where the recipient accepts the responsibility of paying for the charges made on the card.
A minor is not able to legally enter into this type of contract. A credit card account cannot be created for someone under the age of 18, under their own name.
A better option is to add the child as an authorized user on an existing account that is used regularly.
As an authorized user, they have none of the liability but benefit from the payment history. When the child reaches the legal age of 18, they can open their own low-limit account.
Spouse opened credit card in my name
If opening shared credit, it is not uncommon for one spouse to complete a joint application with the other spouse’s personal information.
While it is assumed that spouses will act in each other’s best interest, it is not always the case.
Sometimes identity theft occurs between spouses, but unless it is part of divorce proceedings, it is usually handled privately.
Identity theft by family member
If you’ve just discovered that your parent or spouse had opened a credit card account in your name without your knowledge, they’ve essentially stolen your identity.
A victim of identity theft is required to file a police report if they wish to seek legal protections, regain control over their credit, and remove any damaging information.
This requirement protects the victim and also prevents fraud. If no police report is filed, it could signal a complicit effort on the part of the “victim” and “perpetrator” to have the debt eliminated under the pretense of identity theft.
If the theft is legitimate but a police report is not filed, the consumer remains financially responsible for everything related to the fraudulent activity.
This includes the debt accrued, any late fees or collection fees, and any liability related to the misuse of the personal information including illegal activity conducted under the stolen identity.
This is the first step in reclaiming control over stolen identity. When this is submitted to the creditor, necessary steps can be taken to mitigate any credit damage.
When the creditor has performed its due diligence, the fraudulent charges will be credited to the account, including all late fees and interest. Any late payments, delinquencies, derogatory credit will all be repaired.
Identity theft is a federal crime and protections are in place under these federal laws:
- Identity Theft and Assumption Deterrence Act: makes identity theft as a stand-alone crime against the victims, increased penalties to allow a maximum 15 years in prison.
- Identity Theft Penalty Enhancement Act: Prohibits aggravated identity theft, which means committing felony crimes such as immigration violations, social security benefit theft, and domestic terrorism
- Identity Theft Enforcement and Restitution Act: Clarified restitution –related issues and allowed courts to reimburse victims for the time spent to remediate harm
- Fair Debt Collection Practices Act: Prevents debt collectors from engaging in unfair and deceptive practices
- Fair Credit Reporting Act: Ensure accuracy and privacy of credit reports that consumer reporting agencies collect and share with third parties (banks and other creditors). Allows consumers to dispute information appearing on their CBR
Additionally, each state has laws under which identity thieves will be prosecuted.
Child identity theft by parent
Identity thieves will sometimes steal the social security numbers of minors.
More nefarious is the parent that uses their own child’s information to gain access to cash or credit.
In these situations, the child may not be aware until they turn 18 and apply for student loans or a first credit card.
When the victim eventually turns 18, they could suddenly find themselves in a huge financial mess as well as under familiar duress.
If the victim is underage, they are not legally responsible for the fraudulent debt.
Unfortunately, it is still incumbent on them to find a solution. Hopefully, there is a trustworthy adult in their life who can be relied on to help sort the situation.
Resources for identity theft
Visit the official U.S. government website for identity theft, if you require more information.
Below are the contact details for the credit bureaus to report fraud directly:
| Credit bureau | Phone | Address |
|---|---|---|
| Equifax Alerts | 800-525-6285 | Equifax Consumer Fraud Division P.O. Box 105069 Atlanta, GA 30374 |
| Experian Fraud Center | 888-397-3742 | Experian P.O. Box 9554 Allen, TX 75013 |
| TransUnion Fraud Alert | 888-909-8872 | TransUnion Fraud Victim Assistance Department P.O. Box 2000 Chester, PA 19016 |