Family Fraud

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Family Fraud is defined as an isolated incident where an individual known to the victim steals a credit card or opens a loan under the victim's name and social security number as defined by Joseph R. Miller in "The Borrowing Money Guide, A How-to Book for Consumers". Family fraud is the less severe form of credit fraud because the perpetrator of family fraud is usually a close relative, close friend or caregiver who has access to the home of the victim and/or knowledge of the victim's finances.

[edit] Characteristics

The characteristics of family fraud are: it is an isolated incident, typically the perpetrator needs to get out of a financial bind, the fraud is only one or two credit cards or loans and it is carried out by someone the victim knows. Whereas credit fraud or identity theft is someone unbeknown steals personal information and identification with the criminal intention of ruining someone's credit, running up as much debt as possible and living as long as possible on the illegal gains from the good name and credit.

Family fraud is very emotionally tough because the victim feels betrayed by the perpetrator. It can force the victim to do something that probably won't be easy.... file criminal charges against the perpetrator. Only through filing criminal charges against this person will the victim be able to prove that the debt(s) in question is not theirs. A creditor cannot automatically forgive a debt without any legal documented proof that the loan in question is not valid. Many people who find themselves victims of family fraud choose only to confront the individual with the knowledge of the fraud and hope that the loan will be repaid in full in a timely manner.

[edit] Steps to resolve

There are three steps to take after you have discovered that you have been a victim of family fraud. The first step is to contact the creditor. It is best to talk with the branch manager or a supervisor. Obtain a copy of the signed contract to see what the signature looks like and if it matches yours. If the fraudulent loan is a credit card or a line of credit then immediately have the line closed. The second step is to decide if you are going to file a police report. Either you file a police report concerning the fraud or you choose to become responsible for the debt and have it remain a part of your credit file. The third step is to contact the three main credit reporting agencies and have a fraud alert placed in your credit file.

[edit] Further reading

You can find out more information about this and other unique credit situations in the book “The Borrowing Money Guide, A How-to Book for Consumers”. (ISBN 0-9729855-0-6)