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Lessons and stories from the front lines of fighting identity theft.


Family, Friend or Foe?: What You Need to Know About Familial and Friendly Fraud

Oct 19

By Chuck Whitlock, Identity Theft  Author and Investigative Reporter

An old adage warns, “Trust no one.” Sadly, when it comes to protecting your identity, these words should become your mantra. While faceless scammers on the Internet or other strangers are often the main suspects in identity thefts, the biggest threat to your identity may be posed by someone who is close to you, even someone you love.

Familial identity theft—when a member of your family steals your personal information for financial gain— and so-called “friendly fraud” by anyone close to you whom you trust are on the rise. In 2010, friendly fraud went up 7 percent. In fact, out of all reported identity theft cases, one in seven was committed by someone close to the victim, according to a recent survey. Financial losses in these kinds of cases are usually greater than when the victim doesn’t know the identity thief. The amount stolen is, on average, twice that stolen by a stranger, and it costs the victim over four times as much to try to repair the damage done by someone they know.

It’s easy for family members or friends to steal your identity because they possess one of the best keys to gaining your personal information: your trust. With easy access and because they know your habits, the criminals often act with impunity for long periods of time. Thieves are mainly focusing on victims ages 25 – 34; according to Javelin Strategy and Research, last year over 40% of these victims had their Social Security numbers (SSN) stolen.

Children are becoming popular victims of identity theft. A child’s SSN can be found in school records and at doctors’ offices. Essentially, a criminal may attach any name or birth date to a child’s SSN. Because the thieves gain a clean credit history, a child’s identity is particularly attractive to family members or family friends who are suffering from economic distress. The crime will often not be discovered for many years. According to Identity Theft Investigator Barbara Glass of the Portland (Oregon) Police Bureau, “The statute of limitations in many jurisdictions is only three to five years. By the time the crime is reported, law enforcement is oftentimes helpless to do anything about it.” In the meantime, the child’s credit is in tatters.

Marilyn Pruett (not her real name) can report firsthand the gamut of emotions she experienced when she discovered that someone had stolen her identity. When the nineteen-year-old Oregon woman was denied for a college loan, the company told her that it was because of her poor credit history. Marilyn wondered, What credit history? I’m only nineteen years old! As Marilyn delved further, she began unraveling a trail of lies that had been 12 years in the making. Using Marilyn’s name and Social Security number, over the years her mother had racked up bills for a multitude of purchases, including a home and a car. She had also filed fraudulent income tax returns in Marilyn’s name. The betrayal was enormous.

The young woman was tortured about whether or not to report the identity theft to the police, but she didn’t want to be held personally liable for all the unpaid bills her mother had accumulated. Neither did she want to be brought up on charges of tax fraud. After much thought, Marilyn decided to contact the police. In Marilyn’s case, the statute of limitations had not run its course, and her mom is standing trial as of this writing. Officer Glass confirms that “many victims like Marilyn don’t report the crime” because of close family ties and feelings of guilt.

How should you react if you find yourself a victim of identity theft perpetrated by a loved one or friend? Each situation is personal and complex, adding to the difficulty of knowing what to do once the deception is discovered. You might feel pressure to let the perpetrator off the hook because of the nature of your relationship, but beware: This can have serious repercussions in the future. If you take responsibility for the debt that’s been incurred and find yourself unable to pay for your loved one’s indiscretion, creditors could come after you. In some cases, the problem may be worked out between the creditor and your family member or friend. If you haven’t filed a police report, creditors will turn to you for their money if the thief doesn’t follow through.

Remember that the person used you and your good name for financial gain. The best solution in most cases is to proceed as if the perpetrator is a stranger, beginning with a police report of the crime.

You are probably saying to yourself, My family would never betray me like that! I hope you’re right. To help ensure that you don’t find yourself in the position of having to report a family member or friend to the police:

  • Don’t leave personal financial information where others can find it. Secure your SSN, credit card accounts, banking information and other financial data, and frequently monitor all account activity and statements. A monitoring service such as can help detect identity theft in its early stages.
  • Control access to your children’s personal information, especially their SSNs, by routinely questioning all requests for such data. Once you release that precious information, you can’t get it back.
  • Check your credit reports for fraudulent or suspicious activity at least once a year and seriously consider placing a freeze on your credit report.
  • Be sensitive to the personal situations of close family and friends. In these difficult economic times, individuals who may not otherwise be tempted to turn to economic crimes may find themselves in desperate situations.

As Investigator Glass puts it, “Identity theft is the gift that keeps on giving. Once you think it’s behind you, another surprise pops up.”

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