The Price of Inattenton

January 02, 2015

As we look back at the previous year, I have started thinking about people I’ve talked to this year who have left an impression on me. One of the more memorable people that I was able to have conversations with started with a story that was disturbing on a few levels, but has come to a relatively happy conclusion. The fun part for me was getting updates on her progress and seeing the change in her voice, posture and energy level as things got better. 

During our first conversation, her voice was barely audible, her shoulders were slumped and I wasn’t sure a smile had ever crossed her face. During our last conversation before her promotion and transfer, she was smiling broadly, had a great energy (to use the word perky would be an understatement), and she made Katie Couric look like she needed a caffeine boost. How did she transform, almost in front of my eyes?

The issue we talked about during our first conversation was identity theft and some resulting debt. The worst part of that was that the perpetrator was her fiancé, who is now an ex-fiancé with a warrant out for his arrest. After they got engaged, he moved into her apartment since it was a bit nicer than his place.

What she didn’t know then that she knows now is that he wasn’t paying rent at his place and was very close to getting evicted. While living with her, he found and used her Social Security number, date of birth, and typical security questions like her mother’s maiden name and first pet. He had all the information he needed to pull off his heist.

How? Since she had impeccable credit, he suggested that they open a joint department store card with her so that he could establish better credit. She filled out her portion of the paper application and voila, he had all of her information.

He then opened multiple credit cards in her name alone, and was able to get the mail from the mailbox because he got home from work earlier than she did. He knew what he was doing, and covered his bases. At the end of their relationship, he also applied for an apartment in her name several states away where he had a new job lined up (unbeknownst to her). And for all of the “fake” credit cards, he changed the address to a PO Box so that it would take her a while to put the pieces together after he vanished. Oh, he also got each credit card up to the maximum before he moved out while she was at work one day.

She was hurt. She was shocked. She was embarrassed. Telling a complete stranger (me) that story took incredible bravery on her part and she was emotionally drained after telling me how she got into that situation.

Without her knowledge, thousands of dollars of credit card debt was out there in her name and all of it was 60-90 days late because all of the statements had been diverted to a PO Box. She figured it out when she went to look for a car and got declined for a loan because of all of her outstanding and delinquent debt. That was 3-4 months after he disappeared and left a note that he just couldn’t be in the relationship anymore and didn’t want to stay in touch.

Her first step was getting a credit report from the car dealership. Her next step was complete and utter disbelief, followed by sadness and anger, followed by setting up an appointment to talk about how to work on cleaning up her situation. We reviewed her credit report and were able to find the PO Box, which she visited the next day to retrieve statements.

Along with the $20,000-ish in credit card debt she found, she also discovered the apartment a few states away. He was only there for a few weeks before he moved out of there. Because of her good credit, the landlord didn’t require a security deposit or a month’s rent in advance. Her name is one that I’ve seen used for boys and girls, so when he talked to the landlord on the phone prior to moving, he used her name and assumed her identity.

She called her local police department and filed a report so that the process of healing could begin. Her experiences there left her less than completely thrilled as there was only one officer who handled “white collar” crimes and he was rarely available. It took her weeks to get the report completed and the whole time, her credit score was going down because all of the cards were falling even further behind.

After the police report was filed, she contacted every credit card with a copy of the police report. Some were very understanding and with the police report number and an outline of the facts of the case, they closed the account and did not hold her responsible for any of the balances. And they said that they would remove her account from credit reports. That part took as long as 3-4 months to complete.

Others, though, disputed her dispute. It wasn’t until they sent her a copy of the account opening agreement, with a signature that clearly did not resemble hers at all and she gave samples (from tax returns) of her signature, along with a signed affidavit attesting that the signature wasn’t hers, along with a copy of the police report and the officer’s business card that they finally accepted her lack of responsibility and began the process of removing negative information from her credit report. She also placed a freeze on all three credit bureau files and disputed every fraudulent account.

Eventually, everything got removed, but she will never be able to apply for credit without this situation coming back into her mind. She is requiring that a company extending credit to her contact her for authorization, and she had to invent new answers to her security questions because her ex-fiancé could resurface and try to hack her life again.  It was an arduous process for her, but she got through it with patience and grace.

Some of the things we learned after the facts had all come to light: She was unhappy with her job so she had been interviewing for jobs with other companies. She made it to the final round of interviews with several companies, and had one say she was an ideal candidate. She got exactly zero offers after they did background and credit checks.

While the credit check was never explicitly stated as the reason she didn’t get any of the offers, we can’t help but wonder if it played a significant role. Her car insurance and renters insurance premiums went up significantly. Again, we can’t say for certain that it was because of her credit score going from near 800 to under 600, but no other variable in her financial equation changed much. It made a mess of her life and her stress level for a period of time, and that’s time she can’t recapture. Not to mention, I’m not sure I’d want to be her eventual next boyfriend as she, her parents, her friends and maybe even the local police officer handling her case may all do a round of interrogations before the first date!

The part of her story that makes her one of the memorable people from my past year is that she had a happy ending to this chapter of her life. The credit score improved. The credit reports are all cleaned up.

The silver lining of not getting the other jobs is that she ended up with a significant promotion with a hefty pay raise and a relocation package to an area of the country she has always wanted to explore. The timing was such that she was able to completely wrap up her financial recovery prior to moving so that her new apartment management team won’t see anything except stellar results on her credit score. She doesn’t need to re-tell the story all over again to yet another person.

With her new job, unburdening of stress, higher energy level and overall change in demeanor, she looked nothing like the person I met initially. She had transformed into a newer, stronger version of her prior self with a confidence about her. She unwound a horrible situation, worked her way out of it by spending hours fixing it and documenting every conversation she had and she now feels invincible financially. It was an amazing learning experience for someone barely 25 years old.

What can we all learn from her experience? Make sure you know what’s going on in your financial life! How? Use www.annualcreditreport.com to order a free credit report each year from each of the bureaus.

What I do is order one in January, one in May and one in September.  That way, I am never more than 4 months away from an updated credit report and can spot any changes rather quickly before any damage is done. Look closely for any new items, inquiries that you don’t recognize and addresses that aren’t yours.  Those could be early warning signs.

Also, be careful with who has access to your personal data. I visited a friend recently and he had his tax returns from the last several years on his dining room table and a half-completed credit card application there as well. There were 15-20 people at his house at the time to watch a football game, and if any of them wanted to, they could have completely stolen his identity. I told him this story at halftime and he tidied up the table and locked the files in his desk.

You can also use a free service like www.CreditKarma.com and/or www.CreditSesame.com to monitor your credit score, so if it heads downward you can see an alert that tells you what factor is impacting it and that can serve as an early warning sign also. My take away from her case is that we must all be aware of what is going on in our financial life. If we fail to pay attention, it’s possible for bad things to be happening beneath the surface.