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That happened to me years ago. I was informed (after the fact and just before the statement arrived) that a friend's wife had charged something to my credit card. I called up the reg and asked "WTF?". He referred me to the FBO. I told the FBO "Within 24 hours from now, one of three things will...

My attitude towards loans to friends is that I consider it a gift. If the person is somebody I don't feel close enough to make that big a gift to, then he doesn't get money. For Scns asking for loans years ago, I would just tell them "If the bank doesn't consider you a good enough credit risk...