Q. Our mom doesn’t have a lot of money. She is showing early signs of dementia, and we know that we will probably need to help her financially if/when her money runs out. She falls prey to all these requests from questionable charities, and she is way too generous with gifts to her grandchildren. She has given me power of attorney, and with her permission I have taken control of her checkbook, credit cards and all bills.
Recently she has asked for her checkbook back and gets pouty when I tell her that it is better for me to handle her financial affairs. She is still driving, and the last time I went to a retail store with her, as we were checking out a representative from the bank inside the store made a point to call out to her by name and said he still had the credit card and checking account application on file ready for her signature. Mom said she didn’t know what on earth he was talking about. I don’t believe her, and now I’m worried that she could open up credit cards and checking accounts of which I wouldn’t be aware. Do you know of a way I could monitor her activity?
A. You are in a tough situation. I’m not sure how your mom would open a checking account without money, but she could easily obtain a credit card and get into trouble by not having the means to pay it in full – or perhaps not at all without handing you the bill. You could monitor her activity by getting a credit report, and you could prevent new accounts from being open by freezing her credit. Here’s how to do both:
1) Anyone can obtain a free credit report once a year from each of the three credit reporting bureaus. You can request a free credit report online at www.annualcreditreport.com or by calling 1-877-322-8228. The three bureaus are: Equifax, Experian and TransUnion
2) A security freeze can be placed on a credit report. To place a freeze, you will need: full name, address and/or addresses over the past five years, Social Security number, date of birth and two items as proof of residence (copy of utility bill, driver’s license, bank statement etc.).
Once a freeze is in place, the credit bureau won’t release information from that person’s credit file until or unless the freeze is lifted. This freeze is beneficial in stopping identity thieves from opening new accounts in their name, but it will also prevent your mom from opening new accounts. Once a security freeze is in place, a creditor asking to review her file before approving new credit will be unable to see the credit score and will treat the application as incomplete until the freeze is lifted.
There is no time limit on a credit freeze; it will stay in effect until you decide to remove it. It can be removed temporarily by unfreezing and refreezing, or it can be removed permanently. A person would want to unfreeze their credit report when applying for any new credit, taking out a loan or applying for a job that requires a credit check. Once a security freeze is in place, you will receive a PIN and instructions on how to lift the freeze.
If you want to lift the freeze, you contact the credit bureaus. Even with a security freeze in place, creditors can still use information to offer pre-approved credit. You can stop these offers by either calling 1-888-5-OPT-OUT or going online at www.optoutprescreen.com
Holly Nicholson is a certified financial planner in Raleigh. She cannot answer every question. Reach her at askholly.com or P.O. Box 97128, Raleigh, NC 27624