Authorized User and Damaged Credit

Generally speaking, an authorized user is not legally liable for the charges on a credit card, as the authorized user never signed a credit contract with the credit card issuer. While a credit card company can, and in many cases must, report the activity on a credit card account on the credit reports of the primary cardholder and all authorized users, only the primary cardholder is legally liable for charges on the account. If, when the deceased cardholder applied for the card, you also signed the credit application, you may be a co-cardholder, and therefore may be liable for the debt. However, if the person who applied simply requested an additional card for you, and you did not sign an agreement with the card company, then you likely are not legally required to repay this obligation. In your case there is not much you can do because the account can be reported on the authorized users credit report.

Credit card companies and debt collectors frequently try to pressure authorized users to pay on accounts after the cardholder has passed away. Sometimes they even misrepresent the authorized user’s legal obligation to repay the debt, implying that the authorized user is legally liable for the debt. I strongly encourage you to consult with an attorney to determine your potential liability for this debt, as issues such as community property (if the late cardholder was your spouse) and whether or not you have used the card since the cardholder’s death may affect your liability. Frequently creditors try to mislead people, telling them that because they have made payments on the account, they are now liable for the debt; however, if you are not otherwise liable for the debt, simply making a payment on the account does not make you legally responsible for the debt.

If, after consulting with an attorney, you determine that you are not legally liable for this debt, you should consider notifying the creditor that you are not responsible for the debt and that you will not be paying it. In addition, you may want to send a cease communication demand letter to the creditor to stop any collection calls you have been receiving. You can find a sample cease communication demand letter here. Hopefully, taking these steps will stop any further collection activity on the account. If the creditor or its representatives continue to call you after you have notified it that you are not liable for the debt, you may be able to file a lawsuit against the creditor for violating your rights under state and federal collection law. Again, you should consult with an attorney about what steps to take if collection activity continues after you notify the creditor to cease its collection efforts.

I hope this information helps you Find, Save, and Learn.

Best,

Bill

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