It can be devastating to learn that someone took out student loans in your name without your knowledge or listed you as a co-signer on a loan without your consent. It may feel even worse if the crime was committed by a family member or close, trusted friend. While it can take years to process the emotional toll, there are steps you can take to begin undoing the damage and recovering financially.
When it comes to your finances, you likely know that keeping your passwords and identifying information a secret can help protect you from identity fraud. While it can sometimes be convenient to share these credentials, giving even a family member access to your financial information is not without risk. Sharing this information gives another person the ability to borrow loans or open bank accounts in your name, or drain your accounts without your knowledge.
Even when you do your best to keep passwords and other information to yourself, it can be difficult to keep all of this information from the people who are closest to you — or they may simply find ways to access it. For example, your parents and spouse will know or have access to your date of birth and Social Security number. This is why fraud can happen to anyone at any time, despite your best efforts.
[READ: How to Dispute a Student Loan.]
The Student Loan Ranger has received emails from readers who may have been listed as a co-signer on a loan without their knowledge or consent. If you have experienced such student loan fraud by a family member, here are six steps you can take to begin the process of financial recovery:
— Freeze your credit.
— Review your credit report.
— Contact your student loan servicer.
— Contact your school and review your student account.
— File a police report.
— Report the fraud to the federal government.
Freeze Your Credit
If you suspect that you have been a victim of student loan fraud — or any type of financial fraud — or that your personal information has been compromised in any way, the first thing you should do is contact the major credit reporting agencies and freeze your credit. This will stop access to your credit report and protect you as you work to address the damage by ensuring that no one other than you can borrow loans or open any new credit accounts in your name.
To request a freeze, contact one of the three major credit bureaus — Experian, Equifax and TransUnion — and ask to submit a fraud alert. A representative at the respective credit bureau can help you report the fraudulent loan and place a freeze on your credit file.
Review Your Credit Report
Next, review your credit report to check for other instances of fraud that you may have missed. Unfortunately, sometimes you may find that the person who committed the crime that you uncovered may have accessed other forms of credit using your name and personal information.
You can obtain a credit report once a year for free at AnnualCreditReport.com. You can also check with your bank, as many financial institutions now offer free credit monitoring. If you do find other fraudulent loans, accounts or lines of credit, initiate a dispute with both the credit agencies and each lender or financial institution directly.
Contact Your Student Loan Servicer
Next, contact the company that services the fraudulent student loan, alert it to the instance of fraud and ask about your options. You should do this early in the process because the loan servicer may be able to grant you a temporary forbearance while the loan is under review, which would mean you are not obligated to make monthly payments during this time.
The student loan servicer can also help you understand whether you are eligible for an identity theft discharge and assemble the required evidence. Be prepared to provide documentation as needed, including samples of your signature and photocopies of your Social Security card, driver’s license or passport.
Contact Your School and Review Your Student Account
Whether you are a former student or still attending, request a meeting with a financial aid professional at your college to look at the paper trail and get a better idea of the type of identity theft that you are dealing with.
You may already know that you did not sign a promissory note for the loan in question, but this review can help you better understand and report the crime, including the type of proof you will need to provide to demonstrate that you did not apply for the student loan.
For example, you can find out whether the loan records show your name and Social Security number or just your name. You can also take a look at the signature on the promissory note and compare it with your own.
File a Police Report
Once you have a better understanding of what occurred and whether there are any other instances of fraud to report, file an identity theft report with your local police department. This step can be emotionally difficult in cases where the perpetrator of the crime is a family member or close friend, but it is important if you wish to have the fraudulent loan discharged.
If you are not willing to take legal action against your loved one, you can consider working with this person on an alternative arrangement. In this case, you may wish to engage a mediator who can help you work out a legally binding payment agreement or other type of arrangement.
Such an alternative resolution is not always a possibility, however, so if you do not want to be responsible for the loan in question you should file a police report.
Report the Fraud to the Federal Government
In addition to alerting local police, you should also fill out the Federal Trade Commission’s IdentityTheft.gov report. This system will help you create a personalized recovery plan and can give you recommendations based on your individual situation.
If the fraudulent loan is a federal student loan, you should also report it to the Department of Education’s Office of Inspector General. This office investigates cases of waste, fraud, abuse and mismanagement in the federal student loan program, and it will review your complaint to ensure that the correct processes and procedures were followed by your school when certifying the loan.
If the complaint warrants an investigation, it may mean that errors were made, and correcting the school’s procedures can help protect other students who are enrolled in or graduated from your college from a similar situation.
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6 Steps to Handle Student Loan Fraud by Family Members originally appeared on usnews.com