Is There an Identity Thief Hiding in Your Family?
When most people picture an identity thief, they think of a hacker in a dark-lit room or a hardened criminal with no regard for the law. What they don’t envision is their parent, child, spouse, or grandchild.
But familial fraud — in which family members steal your identity to open credit cards in your name and commit other types of fraud — is on the rise.
And those are only the reported statistics.
Confronting or charging a family member with identity theft is a difficult emotional decision. You might believe that your relative just made a mistake or didn’t think it was a crime to use your personal information.
So what should you do if a family member opens a credit card in your name? In this guide, we’ll look at what you need to know about family identity theft, the potential outcomes and dangers, and what you can do if a relative opens a credit card in your name.
How Does a Relative Open a Credit Card in Your Name?
Family identity theft occurs when a family member, spouse, or guardian illicitly uses your personal information for financial gain. One of the most common scenarios is that a family member opens a credit card in your name.
In one example, a four-year-old’s estranged father used the child’s Social Security number (SSN) to take out multiple credit cards. Before the child was old enough to count, he had racked up thousands of dollars in debt [*].
Unfortunately, it’s very easy to fall victim to this type of identity theft.
First, family members are often privy to information that is inaccessible to non-relatives. Opening a new credit card account, at most, requires a name, basic contact information, gross annual income, and employment status. Many credit card issuers don’t ask for a SSN), and few verify the income or even the age of the applicant.
This information could easily be found in your mail or in personal finance documents that are located around the house.
Second, perpetrators of family ID theft can use their relationships with victims to keep credit card fraud a secret. If identity thieves live in the same home with you, they can hide bills and answer phone calls from creditors without your knowledge.
And even if you see the warning signs of identity theft, a family member can use the “trust factor” to persuade you that it’s all “a big misunderstanding.”
Family identity theft can happen in several ways. You should be cautious of the following most common situations:
- Elder fraud: Caregivers and children of senior citizens can take advantage of their elder family members. Many justify elder financial abuse by claiming they’re simply taking money from their inheritance [*].
- Child identity theft: Children have clean credit reports and SSNs, which makes them prime targets for family members who want to commit credit card fraud. What's more, most children won’t discover they’re an identity theft victim until later in life when they apply for student loans or credit cards.
- Spousal fraud: Your spouse — or even your ex — has access to incredibly personal data, including banking information and passwords. Plus, while married couples might choose to combine assets, credit scores always remain separate. A spouse with a low credit score may take advantage of their partner’s good score.
- Other family fraud (siblings, more distant relatives): Siblings and other relatives can also commit family fraud by relying on your trust factor. Anyone who has access to your personal information could be a risk.
- Deceased family fraud (aka “ghosting”): Even a deceased family member could become the target of identity theft. It can take government agencies, credit bureaus, and financial institutions weeks to register someone as deceased. This buys a convenient window of time for family members to commit financial identity theft in a deceased relative’s name.
In any of these situations, look for the typical warning signs of financial fraud and credit card scams— including calls from credit card companies or debt collectors you don’t recognize, unexpected accounts or loans on your credit report, and if a family member’s financial situation suddenly and unexpectedly changes (such as buying new clothes, phones, cars, etc.).
Is Family Identity Theft a Crime?
Yes. Family identity theft is a crime. And if you don’t want to be held responsible for the debt and damage to your credit score, you must treat it as a crime.
Choosing to file a police report, and hold the family member who has opened a credit card in your name accountable, can be painful and difficult. It is normal to feel afraid of ruining the relationship or even ashamed of the situation.
This is understandable. The emotional impact of family identity fraud cannot be understated.
However, not treating family identity theft as a crime makes you vulnerable to some unexpected dangers of identity theft, including:
- Higher auto insurance rates. Depending on the state, many auto insurance companies consider credit scores when determining rates [*].
- A deposit required for utilities. Utility companies (e.g. gas, electricity, etc.) also look at credit scores when someone applies for their services [*]. A bad credit score caused by identity theft can mean you’ll be required to pay a deposit on new services.
- Potential criminal records. Opening up a credit card in someone else’s name is identity theft. There’s always a chance the family member is also using your identity elsewhere — even to commit other crimes.
- Ineligibility for government support or student loans. If the offender has your SSN, they can apply for government support or student loans (i.e., unemployment scams). This will ruin your own eligibility and make it harder to get support in the future.
- You could be considered complicit in future crimes. If the offender is caught and you knew about the identity theft, you could risk appearing suspect or complicit if you knew but didn’t file a report.
If people close to you are willing to steal from you once, they will most likely do it again — especially if there are no consequences.
Did a Family Member Open a Credit Card In Your Name? Here's What To Do Next
- Decide if you want to confront the family member
- Call the credit card issuer and cancel the account
- Gather any evidence of financial fraud
- Report the identity theft to the Federal Trade Commission (FTC)
- File a police report with local law enforcement
- Place a fraud alert with the three credit bureaus (Equifax, Experian, and TransUnion)
- Consider freezing your credit
- Dispute fraudulent charges and repair your credit score
- Change your passwords and secure your online accounts
- Consider signing up for identity theft protection services with credit monitoring
After confirming that a family member has opened a credit card in your name, here’s what to do next:
1. Decide if you want to confront the family member
The first thing you should do if a family member opens a credit card in your name is decide if you want to confront them.
If you don’t confront the family member, you could be liable for all the debts they’ve accumulated.
Even if you don’t want the family member to get in trouble, you won’t be able to fully recover from identity theft without filing a police report and an official complaint with the FTC.
If you do decide to confront the family member, consider your motives for doing so. If you’re looking for a sense of closure, be aware that you may not achieve this. Your relative will most likely tell you whatever you want to hear to stop you from pressing charges.
If you’re at all afraid that the person may become violent, prioritize your safety and let the police handle any confrontation.
2. Call the credit card issuer and cancel the account
Next, you need to get rid of the fraudulent credit card account.
Call the credit card company and explain what happened. They’ll close your account and walk you through the next steps (such as issuing you a new account number or replacing a stolen credit card).
The credit card company may require an official FTC identity theft report before closing the account. If this is the case, tell them you’ll call back once you’ve made your report.
3. Gather any evidence of financial fraud
Before you can file a police and identity theft report, gather the following information:
- A recent copy of your credit report showing the fraudulent accounts (you can get a free credit report at AnnualCreditReport.com).
- Credit card statements showing transactions that you didn’t make or authorize.
- Debt collection letters or other evidence of outstanding debts that you didn’t take out.
- Any proof or correspondence with the family member who stole your identity.
Make sure all of your evidence is dated and original.
4. Report the identity theft to the Federal Trade Commission (FTC)
An official identity theft report with the FTC is required to prove your identity has been stolen, shut down fraudulent accounts, and repair your credit.
Go to IdentityTheft.gov and follow the instructions there to file your claim.
Once you’ve completed the steps, you’ll receive some helpful identity theft resources — including a customized recovery plan, template letters to creditors, and an official document you can use when you dispute charges and file a police report.
5. File a police report with local law enforcement
Filing a police report isn’t always necessary when it comes to identity theft. However, it’s a requirement in the case of family identity theft (when you know the perpetrator). Here’s why:
- Withholding information may make you complicit if this person is later accused of other crimes. A police investigation could also lead to crimes the family member committed against you.
- If someone has stolen your identity once, they may have stolen it other times. There may already be police records in your name, which can only get cleared if you file a police report.
- Some financial institutions may require a police report to resolve disputes.
To file a police report, either call the non-emergency line (i.e, not 911), or go in-person. Make sure you have your FTC report and any other proof of the crime.
If the family member lives in a different city or state than you, file the report with the local police department in the municipality where the family member lives.
Also, don’t let the age of the victim stop you from filing a police report.
Some people avoid pressing charges out of fear that the victim won’t be able to properly testify (such as in the case of child or elder fraud). But cases like this rely on forensic analysis of financial records as opposed to witness testimony [*].
6. Place a fraud alert with all three credit bureaus
A fraud alert requires companies or lenders to verify your identity before issuing new credit in your name. It’s a practical step to protect your credit from any future fraudulent activity or scams.
An initial fraud alert is active for one year, and an extended fraud alert can last for up to seven years if you think your identity is still at risk.
The good news is that you only have to contact one of the three major credit reporting agencies (Equifax, Experian, and TransUnion) to set up a fraud alert. By law, they’re required to alert the other two of the alert.
Here’s how to place a fraud alert with each credit bureau:
- Equifax: Place a freeze online or call 1-800-349-9960.
- Experian: Place a freeze online or call 1-888-397-3742.
- TransUnion: Place a freeze online or call 1-888-909-8872.
7. Consider freezing your credit
A credit freeze is an additional security measure that stops anyone from accessing your credit report — even you. This means you won’t be able to open new accounts or take out loans until you lift the freeze.
Unfreezing your credit shouldn’t take more than an hour, but that’s not a guarantee. However, with Aura, you can instantly lock and unlock your Experian credit file with a single click.
Consider a credit freeze if you think your financial accounts are still at risk or if the family member may have shared or even sold your information on the Dark Web.
If you do decide to freeze your credit, you must contact all three credit bureaus individually.
8. Dispute fraudulent charges and clean up your credit report
A family member opening a credit card in your name can cause serious damage to your credit score.
Call any company where fraud has occurred and dispute new accounts, incorrect information, and fraudulent transactions on your credit report. You can submit disputes and ask for fraudulent accounts to be removed using the following links:
9. Change your passwords and secure your online accounts
If your financial and personal information has been compromised, your online accounts could also be at risk. Immediately change your bank account login information and email passwords.
Family members often know your commonly used passwords. So if you’ve been the victim of identity theft, you should update all your passwords — not just passwords for financial accounts.
Use secure passwords or passphrases that include at least eight characters and a combination of upper and lowercase letters, numbers, and symbols. And set up a password manager which will keep track of your new logins and alert you if your passwords have been compromised in a data breach.
You should also consider changing any compromised IDs — such as your driver's license and SSN. (Although it's unfortunately not always possible to change your SSN, even after identity theft).
10. Consider signing up for identity theft protection
Identity theft protection monitors all your accounts for signs of fraud. If someone from your family or even a complete stranger is trying to steal your identity, you’ll receive a notification in near real-time so that you can shut them down.
With Aura, you get:
- Credit monitoring with near real-time fraud alerts. Aura monitors your bank accounts, credit file, and other accounts for signs of fraud. Aura’s fraud alerts are up to 4X faster than the competition — so you can detect and stop scammers quickly.
- Online account monitoring and identity theft protection. Aura keeps track of all your online logins and passwords with a powerful password manager. You’ll be alerted if any of your accounts are compromised or if your information has been leaked to the Dark Web.
- Antivirus with protection against malware and phishing sites. Aura also protects your devices and network from hackers by using military-grade encryption and powerful antivirus software.
- Family identity theft protection for your children and elderly relatives. Aura’s Family Plans include coverage for up to five adults and children.
- White Glove Fraud Resolution Team. Aura’s U.S.-based support team is available 24/7 to walk you through the steps required to deal with and recover from financial fraud.
- A $1,000,000 insurance policy. Every adult member on your Aura plan is covered by a $1 million insurance policy for eligible losses due to identity theft.
If you’ve been the victim of identity theft once, there’s a good chance it will happen again. Up to 30% of identity theft victims are targeted multiple times [*].
Are You Responsible for Debts a Family Member Took Out?
The good news is that most credit card companies have “zero liability” protection for fraud — as long as you report the incident quickly and file an official report with the FTC. (Be sure to check your credit card issuer's fraud policy.)
Unfortunately, this means that if you don’t report a credit card taken out by a family member, you’ll most likely be held responsible for all debts, damage to your credit report, and crimes committed in your name.
Some people set up a legally binding agreement with the perpetrator to avoid criminal charges. But this is a slippery slope, as most people commit financial identity theft because they don’t have money.
Plus, unless the perpetrator and the credit issuer agree to move the fraudulent account to the perpetrator’s SSN, any credit card debt and damage will stay on your credit file.
How To Protect Your Credit From Fraudsters (Family or Not)
A family member opening a credit card in your name may seem far-fetched. Unfortunately, credit card fraud of all types is more common than we realize.
Protecting your credit and financial livelihood from scammers requires that you be vigilant and proactive. Here are a few steps that you can take to reduce the chances of becoming the victim of credit card fraud:
- Request your free credit report from AnnualCreditReport.com and look for potential fraud or incorrect information on your report.
- Shred credit card applications, free card offers, bank statements, and any other mail that includes your personal information.
- Be cautious if your mail stops arriving. Scammers will use a change-of-address scam to reroute your mail and receive your sensitive financial information or replacement credit cards.
- Avoid mentioning a good credit score to anyone. This information makes you an attractive candidate to anyone who might consider opening a credit card in someone else’s name.
- Try not to keep too many credit cards. It’s easier for missing or stolen cards to go unnoticed when you have multiple cards.
- Review both your bank and credit card statements each month and investigate any unfamiliar charges, no matter how small.
- Sign up for credit monitoring to automatically keep track of your sensitive accounts.
The Bottom Line: Keep Your Finances and Identity Safe
Identity theft is an insidious crime. But it becomes even more harrowing and complicated when a family member is the offender.
The best option is to be proactive about protecting your identity and preventing credit card fraud. If a scammer or desperate family member can’t access your sensitive information, they can’t put your identity at risk.
To keep yourself and your family safe, consider signing up for Aura.
Aura will alert you of any fraudulent activity on your accounts and let you know if your sensitive information is being used to open new credit cards, take out loans, or worse. And if something terrible happens, each adult on your plan is covered by a $1,000,000 insurance policy for eligible losses due to identity theft.