Dear Credit Card Adviser,
With credit cards you can make an application over the telephone. If a card goes into default, how do they prove an agreement since nothing was ever signed?

Dear Richard,
Good question. The bad news, if you hoped you wouldn’t owe anything, is that issuers have a number of ways to demonstrate the account is yours. I spoke with a couple of attorneys to find out how issuers would prove it in court.

The easiest way for them to prove you authorized the account is by playing back the sound of your lovely voice. Application calls usually get recorded. An issuer could put the recording on a CD and use it as proof, explains Pittsburgh attorney Greg Artim, whose firm handles credit card collection defense.

While the conversation is recording, you’re giving out personal information — your Social Security number, date of birth, mother’s maiden name, etc. — and these identifiers are matched against a corresponding credit file.

There’s also the fact that you have to activate the card after it arrives in the mail, and the issuer usually has you call from your home telephone number, a number verified against the one on file.

Card usage also shows acceptance of the account. Upon signing each receipt, “you are approving and promising to pay the charges that are made in connection with that transaction,” says David Szwak, a Shreveport, La.-based attorney and chairman of the Consumer Protection Section for the Louisiana State Bar Association.

“There are some courts who have gone so far as to say, ‘you received billing statements thereafter and you sent a check and paid for it, and you never complained about it,'” he says.

Identity fraud is a different animal. If someone else opened the account in your name, you’re not responsible for the charges, but you need to take some immediate steps to clear your good name. Read the Bankrate feature, “12 steps for victims of identity fraud,” for more information.

“If you don’t have the card because it truly was fraud, then you need to contact that company and file a fraud claim with them,” says Artim.

Read more articles by the Credit Card Adviser.

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