 Credit
cards: 'Joint' vs. 'authorized' user
|
 Dear
Bankruptcy Adviser,
My mother has a department store credit card for which I was initially
an "authorized user." Since she has a high balance, that
is affecting my credit score, I asked that I be removed as an authorized
user. It came as a surprise to learn the department store has me
down as a "joint user." I never signed papers, but I did
furnish my driver's license on one occasion and paid her bill for
many months when she could not. What measures can I employ to change
my status as a joint user on this account?
-- Annette
 Dear
Annette,
You need to resolve this issue immediately. If you were originally
an authorized user, you had the right to make charges to the account but were
not legally obligated to pay any debt in the event of delinquency. If you are
now being treated as a joint user you can be held personally liable for any delinquent
balance. However, if you did not sign the original loan application and never
provided your Social Security number, then you are not a joint user and will likely
be able to find a way out of this mess.
Your first step can be to send a fax, and a letter by certified
mail, to a manager at the collections agency demanding that they
provide you with copies of the original agreement. Or, your first
step can be to retain an attorney who can help.
Let me tell you a story, Annette, a very boring (but short) story,
about friend who recently called me to say that he was receiving
collection calls. The friend originally opened up a credit card
with a girlfriend and was noted on the account as an authorized
user. He never gave his Social Security number and never signed
any application.
I contacted the collection agency and demanded "verification
of the debt." This is the right to obtain verification under
the Fair Debt Collection Practices Act. Under this act, debt collectors
must, within five days of their initial contact, provide specific
information and documents including a description of the right to
dispute the debt and how to go about it.
Putting this right to use,
I asked to see the original loan documents, because they would prove what my friend
did or did not sign. The collection agency did not want to help. They just said
that they would sue my friend.
My next step was to contact the original
creditor -- the one that had sold the debt to the collection agency -- and demand
verification of the debt under the act. They tried to stonewall by saying they
no longer had the original loan but I finally got the requisite documents. They
proved that my friend had not signed or given a Social Security number.
I
then contacted the collection agency with this information. The manager was so
upset that he was speechless, but he soon verified the claim and closed the account.
He also was forced to remove the negative mark from the friend's credit report.
The moral of the story is this: Know your rights and exercise them to
protect your credit. If you don't know your rights or are shy about defending
them, hire someone who will. It's in debt collectors' best interest to cast a
wide net when trying to get a debt paid; if you know your rights and defend them,
the net won't snare you.
Justin Harelik is a practicing
bankruptcy lawyer in the Los Angeles office of Price Law Group. To ask a question
of the Bankruptcy Adviser go to the "Ask
the Experts" page, and select "bankruptcy" as the topic. |
