 Protecting the mentally challenged
|  Dear
Dr. Don,
My mentally challenged foster brother works and has been
able to get credit cards. In the past, things got so bad that he declared
bankruptcy and with that we thought his problems were over.
We
recently found out that he was issued another credit card and now owes $2,000,
which is a lot considering he works part-time as a dishwasher. Is
there a way that the agency that works with him on life skills and money management
can have something added to his credit report so no new credit can be issued unless
they approve it? They are now working to set up a repayment schedule for
a loan he can't afford and that no lender in their right mind should have ever
made.
-- Susan Stressor
 Dear
Susan,
In large part the ability to set up some defenses against your mentally
challenged foster brother applying for, and receiving, credit depends
on his standing in managing his own financial affairs.
That's because many of the protections have legal
requirements that the only person that can request the action is
the named individual on the credit report.
I
asked Rod Griffin, the senior manager of public education at Experian, to provide
a little more background about this issue. Here's what he had to say: "Unfortunately,
if the individual is independent, there is little that can be done legally. Even
opting them out without their knowledge would require using their identifying
information without their knowledge, and so could be construed as fraud, presenting
serious implications if the individual were to pursue the matter through the legal
system."The bottom line is that the credit reporting
companies cannot prevent someone from having access to their own credit report.
The credit reporting companies certainly can't prevent a person from having access
to their credit history simply because someone else asks them to do so. "However,
if the person is subject to a legal guardian or conservatorship, there is some
recourse. The legal guardian or conservator can request that a statement be added
to the impaired individual's credit history requesting that the guardian or conservator
be contacted before granting credit to the individual because of their mental
condition. "The FACT Act requirements for businesses to
respond to fraud alerts on credit reports have significantly strengthened the
effectiveness of such statements."
If there is a guardian or conservator that can act
on your foster brother's behalf in financial matters then the following
options may open up. I say "may" because it's really up
to guardians or conservators to know the limitations of how they
may act in place of their wards.
Putting a freeze on his credit reports is a good first
line of defense against your foster brother getting additional credit
cards. The Bankrate feature, "Does
your state allow credit freezes?,"
shows that there are some states, such as Pennsylvania, that allow
consumers to freeze their credit reports without first being the
victims of identity theft.
The freeze would block the opening of new credit accounts
where a credit check is required for approval. I'm making the presumption
that your foster brother would face a pretty high hurdle in unfreezing the reports
on his own. Closing the existing account to new charges will
stop him from running up the balance on the card. The outstanding balance
doesn't go away, and any late fees and over-the-limit fees could move that balance
higher. A debt management plan through a credit counseling agency can potentially
lower the interest rate on the debt and finesse these fees. The FTC Facts
for Consumers guide, "For
People on Debt Management Plans: A Must-Do List,"
is a great quick review of the topic for you to understand what it can and can't
do for him.
Opting out of receiving credit card offers will virtually
stop him from getting new credit card offers in the mail. Why only
virtually? The opt out only stops firms that use credit reports
to prescreen recipients. The number to call to opt out is (888)
5-OPT-OUT.
To
ask a question of Dr. Don, go to the "Ask
the Experts" page, and select one of these topics: "Financing a
home," "Saving & investing" or "money." | 
