My wife's sister has been using her SSN to apply for credit! What steps do we need to take to fix this?

[thinknot]

assuming the information was false.. ie.. sisters income etc..not the wife's.. it sure is fraud. Its lying on an application for financial gain.

 

If wife gave permission it seems to be they both committed fraud against the bank.

 

best bet is to pay it off in that case.

Edited July 3, 2015 by thinknot

[dansamy]

It is fraudulent because the sister used her own income to obtain the cards. Ability to repay is one of the points regarding credit card issuance. The sister used her ability to repay, not the wife's who is the cardholder.

[tobettercredit]

-,;d!

Edited July 3, 2015 by tobettercredit

[nocavehoes]

Sorry about the pocket post. I would definitely fix the address and freeze the credit reports before any next steps

[TWonline]

Criminal fraud requires criminal intent, namely to deprive the issuing banks of money with no intention of paying it back. A quote directly from findlaw.com:

 

Criminal fraud requires criminal intent on the part of the perpetrator, and is punishable by fines or imprisonment. Civil fraud, on the other hand, applies more broadly to circumstances where bad-faith is usually involved, and where the penalties are meant to punish the perpetrator and put the victim back in the same position before the fraud took place.

While the exact wording of fraud charges varies among state and federal laws. the essential elements needed to prove a fraud claim in general include: (1) a misrepresentation of a material fact; (2) by a person or entity who knows or believes it to be false; (3) to a person or entity who justifiably relies on the misrepresentation; and (4) actual injury or loss resulting from his or her reliance.

Most states require that each element be proven with "particularity" -- meaning that each and every element must be separately proven for a fraud charge to stand.

 

 

1. Was there a misrepresentation of a material fact? Yes.

2. Did the sister know that misrepresentation was false? Yep.

3. Did the banks justifiably rely on that misrepresentation? You betcha.

4. Was there actual injury to the banks? Not yet. And more importantly, was there criminal intent to defraud? Not yet, and not likely. The sister obtained permission prior to opening any accounts. And presumably she's been paying *something* to the banks, or else the accounts would be in collections/charge-off status.

 

So is it criminal fraud? Not looking good so far.

 

Now is it civil fraud? Yes. She certainly violated the contract, and the terms and conditions of granting her credit.

Will the banks pursue legal remedies? Only if they aren't paid back.

 

OP, be very careful. Any attempt to get out of the obligation created by your wife's sister would likely change #4 up there to a definitive yes, and result in much nastiness. As others have explained, her only real option is to have her sister return the cards, work out a payment plan to reimburse her or you for repayment of the debt and don't be boneheaded in the future.

[dansamy]

And freeze her reports. The sister has been relying on your wife's credit for long enough to "need" it.

[creditrecovery]

A friend is going through something similar except his brother used his name and they have the same address. It was with permission. He tried to get out of it but now there is a judgment. His most recent paycheck was garnished for $600. This won't turn out well. The bank said the only way out was to file a police report which he couldn't do since the brother had permission.

[stinky1]

this isn't fraud.there's nothing fraudulent having someone to open credit cards for you with your knowledge,and allowing them to charge on them.I do it all the time for my wife.at the same time, since she allowed the sister to do this,she's on the hook for the debt.

The difference here is the wife's ssn was used with sisters name and address. How is that not fraudulent?

[cashnocredit]

 

this isn't fraud.there's nothing fraudulent having someone to open credit cards for you with your knowledge,and allowing them to charge on them.I do it all the time for my wife.at the same time, since she allowed the sister to do this,she's on the hook for the debt.

The difference here is the wife's ssn was used with sisters name and address. How is that not fraudulent?

 

No, the sister didn't open the account in her own name. The OP's statement says the sister opened the card in the wife's name using the wife's ss# with the wife's permission but the sister's address.

 

The wife authorized it and is responsible for the sister's use.

[dansamy]

It rises to the level of civil fraud certainly. Which definitely leaves the wife open to closure, blacklisting, lawsuits, judgements, garnishments. If is a community property state, OP could be held equally liable.

[cashnocredit]

It rises to the level of civil fraud certainly. Which definitely leaves the wife open to closure, blacklisting, lawsuits, judgements, garnishments. If is a community property state, OP could be held equally liable.

 

Only if she doesn't pay. It's her debt. She authorized it. She has no recourse against the issuers though she probably does against her sister. She can tell (I wouldn't advise it) the CC issuers that she let her sister get the cards in her name and their response will be simple: Your next bill is due on ......, Thank you. At the worst they might put her on a special list of folks that don't know their obligations. They will hold her accountable for the debt.

[stinky1]

 

 

this isn't fraud.there's nothing fraudulent having someone to open credit cards for you with your knowledge,and allowing them to charge on them.I do it all the time for my wife.at the same time, since she allowed the sister to do this,she's on the hook for the debt.

 

The difference here is the wife's ssn was used with sisters name and address. How is that not fraudulent?

No, the sister didn't open the account in her own name. The OP's statement says the sister opened the card in the wife's name using the wife's ss# with the wife's permission but the sister's address.

The wife authorized it and is responsible for the sister's use.

Ya, not sure how I misread that. Wife's name & ssn. Sisters address & income. Wife is responsible for the debt for sure. Good advice on freezing reports and closing cards. Now isn't the time to worry about credit scores by keeping the cards open. Stop the bleeding now, fix the credit later.

[girliegirl]

this isn't fraud.

 

there's nothing fraudulent having someone to open credit cards for you with your knowledge,

 

and allowing them to charge on them.

 

I do it all the time for my wife.

 

at the same time, since she allowed the sister to do this,

 

she's on the hook for the debt.

This is absolutely fraud. Used sister's name and ss# but used her own address and employment information. There is a reason why on applications you have to agree that all information you enter is correct and true...

 

Falsifying income and employment is fraud. That's why that housewife from NJ is in prison right now because her husband opened loans in her her name and falsified her earnings and her employment.

 

If you try to get out from under the debt, the banks could realize what happened and come after your wife and her sister for fraud.

 

 

Sent from my iPhone using Tapatalk

[girliegirl]

4. Was there actual injury to the banks? Not yet. And more importantly, was there criminal intent to defraud? Not yet, and not likely.

The fact alone that the OP was trying to see if there's a way to get his wife out from under this debt proves criminal intent in any court of law. Be careful what you post on the Internet, folks.

 

 

Sent from my iPhone using Tapatalk

[moneypyts]

OP --

 

I'd suggest calling a couple lawyers. You're getting some advice here, but given that it's a $35,000 problem, it's worth your while to look into some professional opinions.

 

Pick up the phone book, cold-call a couple personal finance lawyers. Or maybe bankruptcy lawyers. If you call 10 offices during business hours, you'll get to talk to 3 lawyers for about 4 minutes apiece. Just give them the brief story, and ask if they have suggestions as to how to proceed from here. After 4 minutes they might start to get antsy and want you to come in, just thank them for their time and move on to the next one in the phone book.

 

Keep notes. In particular which offices were helpful in the event that you do want to have representation by a lawyer you'll have some idea as to how you would get along with a handful of different possible choices.

 

As an aside, I'm sorry you and your wife need to go through this. It sounds like it will be an expensive lesson, but hopefully something you will learn something from, and be stronger and wiser in the long run.

MP

Edited July 3, 2015 by moneypyts

[dcowboy08]

You will also need to explain any issues with the IRS, under their laws and rules. This will certainly make liable anyone owning the original ss#. You might want to seek counsel to protect you and your spouse.

[mizliz1011]

when you call a lawyer you will need, so that you don't waste the time telling the story:

 

copy of yours, wife's and sister's credit report

 

list of all credit cards, date opened, line of credit, amount outstanding , status of any lates etc including judgements, PRs, etc

 

breakdown of yours, sister's and wife's assets and earnings and other credit obligations (balance sheet and income and expenses statement)

 

a statement from sister of what her intentions are so far as repayment and what she will do to cut back her lifestye to minimum

 

a brief statement from wife of EXACTLY what she authorized and when- be specific, signed and notarized

 

a brief statement from sister of EXACTLY what she believes her sister specifically authorized and what she actually did

 

a brief summary of what happened and what your questions are so far as your options, legally.

 

I was a banker for 20 years and this is what I would tell someone to prepare. GET TO AN ATTORNEY IMMEDIATELY.

 

I would have an attorney prepare all correspondence with credit card co's - protect yourself from further harm.

[January2015]

So far everyone has focused on the question of if it's fraud or not (on the part of OP's wife). Nonetheless everyone seems to agrees that regardless of whether this is fraud, the wife is on the hook for the debt, and should pay it.

 

So then the real question becomes the fastest/easiest/best way to pay it. So the OP should provide more info for better answers. Like Income & credit profile for everyone involved. It seems safe to assume that the wife's sister's credit is totally shot - otherwise why wouldn't she have opened her own credit cards in the first place. But is that true? If not, she could open her own cards & balance transfer? Or get a personal loan of some sort to pay off the balances?

 

Also more information about the relationships involved would be good. It might be an abrupt shot of ice cold water, but if the sister has NO intention of paying, shouldn't we similarly counsel the OP on how to handle the debt, w/ his own 0% BT or some combination of BTs for him & his wife to at least save on the interest?

[mizliz1011]

I would also require that sister sign a formal note acknowledging her obligation to pay this back with no time limit to obligation.

 

If money is inherited from their parents, her share should go to your wife.

 

if there are other siblings, they should be informed so she doesn't pull this with anyone else in family.

 

Your wife may not be the only one who has been scammed.

So far everyone has focused on the question of if it's fraud or not (on the part of OP's wife). Nonetheless everyone seems to agrees that regardless of whether this is fraud, the wife is on the hook for the debt, and should pay it.

 

So then the real question becomes the fastest/easiest/best way to pay it. So the OP should provide more info for better answers. Like Income & credit profile for everyone involved. It seems safe to assume that the wife's sister's credit is totally shot - otherwise why wouldn't she have opened her own credit cards in the first place. But is that true? If not, she could open her own cards & balance transfer? Or get a personal loan of some sort to pay off the balances?

 

Also more information about the relationships involved would be good. It might be an abrupt shot of ice cold water, but if the sister has NO intention of paying, shouldn't we similarly counsel the OP on how to handle the debt, w/ his own 0% BT or some combination of BTs for him & his wife to at least save on the interest?

good points and in line with what I said. There is more to this story.

[ICANHASMUNY?]

 

4. Was there actual injury to the banks? Not yet. And more importantly, was there criminal intent to defraud? Not yet, and not likely.

The fact alone that the OP was trying to see if there's a way to get his wife out from under this debt proves criminal intent in any court of law. Be careful what you post on the Internet, folks.

 

 

Sent from my iPhone using Tapatalk

 

 

 

?? Come Again? he stated he would like to get rid of this " if we can" ; let's assume he meant " legally get rid of this"

 

Please re -read the first post; OP is asking for advice on what to do; lets' not jump to the most negative conclusion

 

Please don't continue in this manner ;We're here to help on CB, not to issue judgment.

[cashnocredit]

I would also require that sister sign a formal note acknowledging her obligation to pay this back with no time limit to obligation.

 

 

Not a good idea. Such a term in an agreement is void and not enforceable and potentially could void the entire note. Imagine if our creditors could do that for a loan.

[mizliz1011]

if a note is signed "under seal" there is no statute of limitations, as I understand it.

 

She could also sign a note with a 7 year repayment schedule with interest that mirrors the credit cards by reference with a balloon payment that will be renegotiated at the end of the term.

 

I wouldn't just give up on the sister repaying the bulk of it. Clearly she has been paying for some time and appears to have an income. I think that a little moral suasion with a stick re fraud (by the OP, not the lawyer) might work wonders. We don't know if she has expressed remorse and shame or if she is defiant and devious. As said, we need the OP to fill out the story and how the wife came to know of debt. Did she order a credit report, did she get a turn down on a card SHE applied for, did she suspect something or see a huge credit card bill at her sister's house, Perhaps the sister came to her in shame or fear. Or perhaps she lost her job... OP, we need more information to know what can be done in conjunction with the sister... At the very least, if you have a note you can write off $3K/ year as an uncollectable debt on your taxes but you need a note and a break out of its substantiation.

 

you also need to talk to an accountant. every bit helps. I would def refinance the debt on a BT if you are able to do that...however, she may have shot your credit. Would the parents be willing to help the sister repay at all? just throwing shitola against the wall to see what sticks.

[tobettercredit]

This situation is beyond help from CB members.

 

It can easily(but painfully) be resolved by PAYING and not trying to escape liability.

 

As far as the creditors are concerned husband, wife and her sister can take 10 years to pay this debt.

 

$35,000 is not the end of the world.

 

Sell assets on ebay and Craigslist,tap into 401k, Roth IRA, liquidate some of the stuff bought with the credit cards, do garage sales, go to crowd funding sites, do fundraising from family and friends, etc...

 

There is no fraud if they decide to continue paying their obligation as before.

[shifter]

I love all these armchair lawyers

 

who are suddenly fraud experts

 

and have it all figured out...

Edited July 3, 2015 by shifter

[ubercat]

I would suggest that OP hire an attorney. If you live in a communal property state you might want to hire a second attorney for yourself.

 

Communal property in red: