Rebuilding after a bad relationship can be difficult enough without facing unexpected credit and financial challenges. Unfortunately, far too many people divorcing or otherwise breaking off a relationship discover that they’re deep in debt and their credit has been damaged by accounts they never knew about.
This type of economic abuse is common in relationships that are otherwise abusive. 93% of domestic violence workers surveyed in 2012 said they’d worked with clients who had fallen victim to coercive debt. And, 52% of callers to a national domestic violence hotline who participated in a later survey said their partners had generated debt in their names through coercive or fraudulent transactions.
But, not every economic abuser is physically or verbally abusive. Some victims have no idea there is a problem until they separate.
Common types of coerced debt include:
- One spouse or partner running up debt on the other’s credit cards without his or her knowledge
- One spouse or partner secretly opening new credit card accounts or taking out loans in the other’s name
- One spouse or partner financing a vehicle or other major purchase using the other’s information
- One spouse or partner threatening the other with physical harm in order to force him or her to sign credit applications, provide access to credit accounts or otherwise generate debt against his or her will
Many people assume that debt run up in their names by a spouse is their responsibility, or that they’re liable for those massive credit card bills because a live-in boyfriend or girlfriend used their information to open the accounts. And, creditors, financial institutions and credit reporting agencies are often all-too-eager to reinforce that idea, shifting the burden to the victim.
Identity theft is still identity theft when it is committed by a spouse, significant other, or other friend or family member. And, federal law protects victims in several ways. For instance:
- The Electronic Funds Transfer Act (EFTA) requires financial institutions to conduct an investigation into timely-reported fraudulent transactions, and to reverse transactions found to be unauthorized.
- The Fair Credit Billing Act imposes similar obligations on credit card companies.
- The Fair Credit Reporting Act (FCRA) requires credit reporting agencies to investigate disputed entries on your credit report and remove or correct erroneous entries.
These and other consumer protection statutes provide remedies ranging from a court order requiring correction of the erroneous entry and/or declaration that the victim is not responsible for the debt to monetary damages.
Next Steps for Victims of Coerced Debt
If you’re being pursued for payment of coerced debt or your access to credit has been affected by reporting of debt run up by a former spouse or partner, you have options.
First, report the unauthorized or fraudulent transactions to the financial institution or credit issuer. Do this in writing, and be clear and concise in your dispute, and include any supporting documents such as police reports.
You will also want to check all three of your credit reports (TransUnion, Equifax, and Experian) for items you don’t recognize or believe to be fraudulent. If you find entries for accounts taken out without your consent or charges made by your ex-spouse or significant other without your consent, dispute those directly with the credit reporting agency.
If you’ve disputed coerced or fraudulent charges with a bank, credit card company, other credit issuer, or credit reporting agency and been ignored or received a cursory notice saying the debt or entry has been verified, that doesn’t have to be the end of the road. We frequently help victims of identity theft fight back.
To learn more about how we may be able to help, call 212-500-6114 or complete the quick questionnaire on this website.