Bank Claiming I am Guarantor

[KMJohnson]

In 2002 my father applied for a business credit card at a certain bank. On the application he put my name and my mother's as signatures (authorized users) on the card. Neither my mother nor I signed the original credit card application. Which the bank's customer service business collections rep informed my father while claiming that I was still responsible for the account as a guarantor (their words).

I have asked for a copy of the original application (which they are treating like inational security) to prove that I did not sign anything and have no legal obligation for repayment of this credit card.

The bank is insisting that I am responsible for repayment of the card and is essentially threatening me with legal actions/collections/bad credit rating (who has a good one anymore?). They will not take my name off the account until it is paid even at the request of my father.

What are my options?

[inevitable]

The card-holder is responsible for the charges of the authorized user, but the authorized user is not responsible for paying any charges, including his or her own. An authorized user is different from a co-applicant, who is responsible for paying all charges, including those made by the principal card-holder.

Even FICO dropped this from their scoring model, authorized users used to be able to reap the benefits of the cardholders payment habits, and it would artificially boost their own credit score.

Unless there is some type of fine print or some state law that supercedes, I would say that they are either bluffing, or they just don't know what they are talking about. I would tell them to sue me, and then show up for court, and demand to see the contract that bears your signature. Their case would most likely get thrown out in the quickness. The next time that they threaten you with legal actions, tell them, you are getting your own lawyer, see you in court.

[justbroke]

Well if this is American Express, an authorized user is responsible for his own charges, while the primary card holder is responsible for all charges on the card. This is quite clearly spelled out in the Cardholder Agreement... which no one seems to read.

As far as your options, the only thing you could do is bring forth a suit to compel them to remove your names. That's the only way you're going to get the original application and proof that you're a guarantor or not. Not signing anything, doesn't mean anything, as most applications are electronic these days. You would need to read the specific "additional cardholder agreement" for that specific credit card so see what the terms are/were. When you sign the back of the card and use the card, you do so as an understanding that you agree to the terms.

I'm not siding with the credit card company, I'm just pointing out where to look.

[inevitable]

Well if this is American Express, an authorized user is responsible for his own charges, while the primary card holder is responsible for all charges on the card.

Right,

As I stated,

Unless there is some type of fine print

So hopefully you didnt rack up thousands of dollars using this authorized card, or you might be held responsible.

[AngelinaCatHub]

If, in the event, and "Justbroke" please chime in, that they attempt a suit, you could motion to have them present positive proof of every purchase as well as your authority to do so. This would be a very expensive, time consuming process. How much is this debt? 'Hub

[KMJohnson]

Me Again

The Bank is Wells Fargo. The card was a business card applied for by my father at a Wells Fargo branch. I was authorized and used the card for business purchases only, which is what I did. The debt is approximately $4000.

I have to this date never received any information by mail as to this account other than the card in 2002. Although I am young I cannot remember any credit card agreement, much less anything else about 2002. No yearly updates have been mailed and no actual contact by mail to me personally. They just call (all day long) and leave (or don't) leave messages requesting to talk to me (always pronouncing my name incorrectly - trust me it's not a difficult name). My parents have contacted a third party to take care of their business debts, but that doesn't cover me.

[justbroke]

If, in the event, and "Justbroke" please chime in, that they attempt a suit, you could motion to have them present positive proof of every purchase as well as your authority to do so. This would be a very expensive, time consuming process. How much is this debt? 'Hub

No corrections necessary. I would subpoena the actual application, the credit card agreement at the time of first card issuance, every amended card agreement to date, and every statement showing all the "authorized user's" charge.

I had a similar personal case with American Express on a business card. My brother issued me one on from the business, and it was a temporary card, with only a 2-month validity. I used it twice in the first few weeks (on a trip). My brother asked me, one day, to pay the entire bill, so I personally gave AMEX a check for over $2K. I had only spent like $500 in all my use.

When the card went bad, AMEX tried to colelct from me. I quickly told them that not only was my card only active for 2 months... they could readily see that I only made several charges or less than $500. They will also clearly see that I personally made a payment from my personal checking account for $2000. So, someone owes ME $1,500. They backed completely off and apologized, but thanked me for helping them "resolve the matter". Never ever hit my credit report either! They never called again!

But I was lucky. I could actually document all my usage (less than 2 week's worth), on a card that was only valid for 2 months, and that I made a personal payment of $2K on my purchases of $500.

[Bell30656]

Take out your card and read right above or below the signature line. "...card holder agrees to the terms and conditions set forth..."

[justbroke]

The Bank is Wells Fargo. The card was a business card applied for by my father at a Wells Fargo branch. I was authorized and used the card for business purchases only, which is what I did. The debt is approximately $4000.

And what I underlined, is that you'll have a problem with if you can't prove that you repaid it. I'm just saying that based on my American Express business card experience.

Take out your card and read right above or below the signature line. "...card holder agrees to the terms and conditions set forth..."

Exactly!

[justbroke]

Unfortunately, BigBoy2U, the KMJohnson (the original poster), did make charges on the card. That right there makes them subject to the Agreement. Now, what part of the agreement is arguable because I don't know what part of the agreement it makes the subject too. As you wrote, Amex has an interesting model and actually has two agreements. The Basic Cardholder agreement and the Additional Cardholder Agreement. Many people have caught by Amex's unique agreements and their contracted collection agencies make you feel criminal.

You're right though, it may be best to just let them sue him. I wish KMJohnson luck with this.

[OhioFiler]

I'm with BB2U on this one.

Even the usage she admits was for her father's business. She never used the card personally. I don't know what type of business the father had (i.e. sole proprietor, LLC) but she should not have any responsibilty for his debts if she wasn't an officer and agreed to personally guarantee the debt.

I'd do exactly as BB2U suggests and write them using his ideas.

[justbroke]

Usage of a charge card, whether for personal charges or business charges, is governed by the cardholder agreement. You agree to the terms when you sign the card and present it, or cause it to be presented, for payment.

If the cardholder agreement states that the primary cardholder is repsonsible and that the "additional" user (or authorized user) is not responsible, then fine... I agree that it is not the authorized user's problem.

The problem comes, especially with American Express and other business credit cards, that the cardholder agreement actually states that all charges by the additional cardholder are the responsibility of both the additional cardholder and the primary cardholder. It (the contract) reads all charges... not some charges, not only "personal" charges... nothing like that, and it's for a reason.

Does one have a defense? Absolutely! Challenge the charges and agreement.

As I wrote, I would still do as BigBoy2U wrote as far as inviting them to sue you so that you can see the Agreement or Agreements.

[inevitable]

As I wrote, I would still do as BigBoy2U wrote as far as inviting them to sue you so that you can see the Agreement or Agreements.

Just as I stated in the first reply to the thread.

Next time that they threaten you with legal actions, tell them, you are getting your own lawyer, see you in court.

Although,

If I was a judge, and the cardholder agreement stated that the authorized user is responsible for his own charges, and that cardholder knowingly used the card for buying things, I would probably rule in favor of the creditor, even if the authorized user was never presented with the agreement prior to charging. The saying comes to mind, "having your cake and eating it too".

[justbroke]

Just as I stated in the first reply to the thread.

Yes, you did. I think the conversation just drifted into clarifying the opposing views and why you would need to sue them or let them sue you.

If I was a judge, and the cardholder agreement stated that the authorized user is responsible for his own charges, and that cardholder knowingly used the card for buying things, I would probably rule in favor of the creditor, even if the authorized user was never presented with the agreement prior to charging. The saying comes to mind, "having your cake and eating it too".

I think that's the point and you convey it well -- maybe better than I did. The cardholder saying that they never read the agreement, or never signed anything... actually did sign something when they signed the back of the card, or signed any credit charge slip! The cards also read that "Use of" in indication of acceptance of the terms. All of those items expressly read that signing means that you agree to the terms of the cardholder agreement. It's just basic contract law.

I'm as guilty as anyone else in not actually reading things. The only thing I read all the way through, which BUGGED my closing attorney, was the Note and Mortgage for my rental property.

I have only read cardholder agreements, when an issue came up, I told the card issuer to tell me where in the agreement it says that... and they pointed me right to the line.

[justbroke]

I missed the post where the OP used the card.

I have it for you...

The Bank is Wells Fargo. The card was a business card applied for by my father at a Wells Fargo branch. I was authorized and used the card for business purchases only, which is what I did. The debt is approximately $4000.

At this point I would take a 'sue me' approach and then you can get your hands on the agreement.

In total agreement with this approach.