6 Illegal Money Habits

Signing someone else's name on a check is generally considered forgery and would be illegal in most states, according to Carol Kaplan, a spokeswoman for the American Bankers Association in Washington, D.C. But suppose an adult child signs an elderly parent's name because the parent is incapacitated or a parent signs a child's name because the child is away at college. Guess what? Those signatures are still forgeries, unless a power of attorney is in effect. "In most cases, it's on behalf of a loved one who probably isn't going to object, but people should know that that's forgery," Kaplan says.

The use of someone else's name and identity to obtain credit is an obvious no-no. But suppose -- and Kaplan says she's heard tales of such situations -- a parent whose credit has been ruined uses a child's name and identity to open new credit accounts. Illegal? You bet. "It's illegal to pose as someone else," Kaplan says, "but there is also a moral question: Do you want to punish your child and wreck their credit as well?"

Homebuyers and homeowners who want to refinance may be tempted to inflate their income or hide some of their debts to better their chances of a "yes" from the lender. But lying on a loan application is fraud, and lenders do check up on applicants' information, according to Kaplan.

"You should always be honest," she says. "We all go through difficult financial periods, and it's tempting to want to fudge, but if you get caught, it's going to lead to huge headaches, and you will sleep better at night knowing that you aren't living with a lie."

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