What is Familiar Fraud and How Can It Impact Your Family?
“Familiar fraud” refers to a crime that’s as old as the hills: Victims of identity theft who know the perpetrators as their “family.” Yup, parents stealing their kid’s identities and kids stealing their parents or siblings identities. Sometimes the victims don’t learn of their victimization for decades. Generally once they become of legal ages and start applying for credit, they learn their identities had been used for credit since they were a baby, and the thief, or Mom, didn’t pay the bills.
Whether because of hardships, mental health issues or simple greed, familiar fraud and family identity theft is probably the worst of all because, in order to be forgiven the debt, the victim may be required to press charges against a loved one.
Familiar fraud is believed to be under-reported, likely because victims fear they won’t be believed by authorities or they fear straining family bonds. In other cases it can go undetected; who’d ever suspect a family member could do such a thing? Another reason for non-detection is that the fraud sometimes begins when the victim is only a child.
Needless to say, the fallout of familiar fraud is much deeper than stranger fraud. Imagine the emotional damage when you learn your estranged father is your identity thief.
Imagine the shock of learning an addicted cousin, whom you may hire to remodel your home, uses your credit card for personal purchases and then resells the stolen goods on the street for drugs.
To further complicate things, once when the victim learns that the thief is a close friend or family member they often feel tempted to protect this criminal. They may also want to protect the thief to preserve family relationships or avoid backlash from other family members.
Would you ever tell your elderly mother that your father has been stealing from her for years?
And then there’s the possibility of other family members simply not believing you, perhaps accusing you of making up the story as revenge for a past transgression.
What to Do?
- As difficult as it may be, keep your emotions out of it.
- Review your credit reports and your child’s credit reports at least once or twice a year. When a parent seeks out a child’s credit report and there isn’t one, that’s a good thing.
- Consider resolving the issue without the police if not much damage was done.
It may be tough weighing the pros and cons of handling the situation without involving the authorities. Some experts advise handling it as you would if the thief were a stranger:
- Place a 90 day fraud alert on your credit, file a police report, and dispute all fraudulent charges and accounts. A fraud alert is an extra layer of authentication lenders use to prevent further identity theft. Filing a police report will also allow you to file for an extended fraud alert; this will last seven years. The FTC states “When you place an extended fraud alert, you can get 2 free credit reports within 12 months from each of the 3 nationwide credit reporting companies, and the credit reporting companies must take your name off marketing lists for prescreened credit offers for 5 years, unless you ask them to put your name back on the list.”
- A police report will also free you of charges incurred by a credit freeze. The credit freeze will also be easier from a technical standpoint, including that of clearing your credit.
Additional Safety Measures
- Review your credit card statements monthly—every transaction.
- Report even tiny charges if they aren’t familiar—as soon as possible.
- Never give your credit or debit card out to relatives or friends. If you want to help them, give them cash.
- Enable a credit freeze for your children and yourself. Only Equifax offers credit freezes for children in every state. Otherwise Google your state and the term “Credit freeze” “Children” and you’ll quickly find resources to help determine your options.
- Invest in identity theft protection. Because really, when it’s all said and done, whether identity theft happens because of a complete stranger, a foreign hacker or because of your sister, you want to be able to nip it in the bud and deal with it quickly and efficiently before it gets out of hand and negatively and financially affects your life.
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