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Information About Collection Efforts Against Authorized User - The Bills.com Blog
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Information About Collection Efforts Against Authorized User
Question: Due to the death of main card holder being an outhorized user I was made the responable party to pay balance..I called the card company and they said it would be paid off but when I got the answer back being a natural death would not pay..I had an accident and cut my hands could not work for over 3 months but being self employed not qualified forpayment..I could not get insured on the debt protection a few years ago because I was only a user of the card..I find I'm still being charged over 100.00 month for the coverage even tho after not getting help when I first needed it I ask to remove it but that and enterest is all that being charged to the account..What can I do to have a credit for the charges of insurance and get this to where I can manage to pay a large part of all before something happens ..I'm over 70 years old and would like to try and settle this if possible. Thanks
Answer: 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.
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 encourage you to visit the Bills.com Debt Help page to learn more about debt and the options available to those struggling with their bills. In addition, the options described on this website may be able to help you if you determine that you are legally liable for this account. I wish you the best of luck in your efforts to resolve this debt, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
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1. Posted by Renee on Monday 21st April 2008 09:56
I opened an american express business credit card for my company which is a LLC. Due to a sagging economy, the business has not been doing well and the credit card bill has not been paid and has been turned over to a collection agency. Well, when I pulled my personal credit report it is showing as an adverse item on my personal credit report. It is also showing on the additional card holder's personal credit report as well. Isn't this illegal? I gave them my federal tax id number when I applied for the card so why is it appearing on my personal credit report?
2. Posted by Bill on Monday 21st April 2008 10:05
You will have to speak with American Express to clarify the situation. If this information is innacurate then start disputing this information with each of the three credit bureaus. You can find the FTC's guide to disputing here: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm
3. Posted by nancy on Tuesday 10th June 2008 10:57
my late husband had a large balance on credit card, with me as authorized cardholder...I was told I am not legally responsible for this debt by the card company. a debt collector has told me they would do an asset search on my husband. he was one-third owner of our home and that's all that would show up. will the debt collector take action bearing this in mind?
4. Posted by Bill on Tuesday 10th June 2008 15:48
The debt collector will probably go after your late husband's estate. The responsibility of the debt will now fall on the legal heir; whoever would inherit his share of the property and/or assets (who will also inherit his debt).