If you really can’t bring your relative to the police, but the thief is willing to take responsibility for the debt and pay restitution, the Identity Theft Resource Center suggests transferring the debts into his or her name and signing an enforceable contract that she or he will pay it off. However, this option requires that your near and dear will admit to the crime – and it is a crime – in writing, that the creditor(s) cooperate and that you do a serious amount of legwork to clean up your credit reports without a criminal filing, which is difficult to do.
But let’s be honest: many of the people who are willing to screw over family members for money aren’t exactly the type of folks who are going to want to admit to that in a legal document, much less pay you the money they forced you to owe. That said, if you feel you can’t report the crime -- and they won’t admit to it -- your remaining option is to simply pay back the debts incurred in your name, as creditors are unlikely to take your word for it and write off the debts.
If you do decide to take on the financial burden of paying off your relative’s debts, keep in mind that it will cost you far more than just the money involved: your credit report will reflect the past delinquencies and liens for seven years. This will definitely impact your own ability to access credit at reasonable rates, open new utility accounts and even, in some circumstances, hinder your ability to get hired for certain positions, and get (or keep) security clearances.
If you think you might have been a victim of identity theft, by a member of your family or anyone else, it’s important to monitor your credit for anything out of the ordinary: primarily accounts and delinquencies you don’t recognize. You can get a copy of each of your three major credit reports for free once a year, and you can use a free tool like Credit.com’s Credit Report Card, which provides users with an overview of their credit standing using letter grades, along with free credit scores that are updated monthly. Detecting the problem is the first and most important step.
It can be hard to accept that the people you're supposed to be closest to -- your family -- can be the ones behind the devastation that identity theft wreaks on your life. But, with the increasing likelihood that all of us will suffer a data breach, which makes us more vulnerable to identity theft, it's important to be vigilant with our accounts, our credit reports and our personally identifying information. If you catch even a family member early enough in an identity theft attempt, the worst case scenario might not ever have to come to pass.
Adam Levin is chairman and cofounder of Credit.com and Identity Theft 911. His experience as former director of the New Jersey Division of Consumer Affairs gives him unique insight into consumer privacy, legislation and financial advocacy. He is a nationally recognized expert on identity theft and credit.