AmI responsible for a debt if myfriend took out an on-line loan and used my name as a personal reference?

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AmI responsible for a debt if myfriend took out an on-line loan and used my name as a personal reference?

My friend took out an online loan and used my name as a reference, I got a call from the company saying my friend had defaulted, and if I didn’t pay the balance they would send sheriff’s to my address to serve me papers, and possibly arrest me. I never signed anything, and didn’t even know my name was used. The company said the contract my friend signed stated that in the event he didn’t pay, his references would be responsible for this debt. Is this legal? Can anyone just get a loan and put down a strangers name and not pay?

Asked on October 1, 2010 under Bankruptcy Law, South Carolina

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Absolutely not.  You are in no way responsible for paying his debt unless you actually co-signed the loan.  I would contact the state attorney general's office immediately and I would contact the Federal Trade Commission with the name of the company - who is acting as a debt collector at this point - and the Banking Commission if they acted as a lender.  This type of behaviour is intolerable and you should consult with an attorney about harassment as well.  It is criminal to threaten you with arrest for someone else's loan (it is criminal to threaten them as well).  I would do whatever it takes to bring these people down and stop them from this behaviour ever again. Good luck.


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