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Discussion in 'Credit Talk' started by sue, Sep 5, 2000.
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Yes, if they don't pay, in the end, the creditor will come after you.
They will harass both of you and hurt both of your credit reports until they get paid.
however, they cannot legally require an authorized user to pay anything - all they can do is harass them.
Legally, an authorized user has NO obligation what so ever to the creditor. They are merely authorized by the primary cardholder to use the account if they wish.
Contrast this with a co-applicant who actually signs the credit application. This person is legally obligated for the debt incurred on the account.
Here's the rub:
The creditors and CRAs, in collusion, report the performance of the account on an authorized user's credit report as well, even though that person has no legal obligation for the debt. This only serves to give the creditor some leverage with the authorized user to coerce them into paying on the debt if the account holder fails to fulfill their obligations, as they can threaten to put the bad trade line on the authorized users credit report. I think this is patently unfair.
This does cut both ways though. It's one way of getting some positive trade lines on your credit history if you can convince someone with excellent credit habits to put you on their account as an authorized user.
Conversely it can also be a way for scheming, conniving, and vindictive people to ruin someones credit by sticking them on their account as an authorized user without their knowledge and then blowing off the account. Think 'ex-spouse'.
This whole matter is currently the subject of a class action lawsuit. See http://lawyerphillips.com/ for more info. Click on the link for his current cases.
I do believe that if an 'authorized user' makes enough of a stink that the CRAs will delete that account from their credit history, but it will likely show right back up when the creditor reports the next time.
Bottom line: If you are putting someone on your account as an authorized user provide only their name and no other information. That's really all that's required so a card can be issued with their name on it. Do not give a SSN or DOB, address, middle initial, mother's maiden name or anything else. The only exception would be if you are putting someone on your account for the purposes of getting them a positive trade line.
If you are an authorized user and are being harrassed by a creditor, remind them that you have no legal obligation for the debt, as an authorized user. Your permission is not required by creditors to be designated as an authorized user. If they institute collection procedures against you, the have violated the FDCPA. If they report you to a CRA, dispute it citing the FCRA and FDCPA.
Creditors will try and get whatever money out of whoever they can if an account goes bad. Don't be surprised if they call up Aunt Gert who you had those lovely flowers delivered to for her birthday have them try to shame her into paying for them.
In addition J. Edgar's statement, let me explain to you what happened to me:
My ex got me a card under the additional card rule. I didn't want the card (because I knew how irresponsible he was) so I cut it up. He blew off the account and it went to collections, etc. The did not harass me because the only information that he gave them was my name. The charged off account showed up on my credit report (I'm still trying to figure out how they got my ssn??)! I called and disputed with them and the agent told me that since I was only an authorized user, this would not hurt my credit. My argument was: Well if this won't hurt my credit, then why is it even on there? We argued for 1/2 hour. Then I got the agents first and last name and told her that I was going to order a card under her name on my account and blow it off! She got nervous! I disputed this with the credit bureau...they took it off!
My thoughts: You shouldn't be allowed to just order additional cards for anybody without their consent first. I didn't not sign anything to get the card, therefore I am not liable...period!
I ordered an additional visa card for my new boyfriend. At the time he only credit he had was a Sears card. He went to apply for instant credit at Macy's (you need and ID and a major credit card, so he used the visa that I got him) and was approved! Then shortly after that, he applied for an Am/Ex Gold card and was approved! He didn't even have a bank account. I was dumbfounded by this. I know he was approved due to the fact that my visa is in PERFECT standing and has been since '92. But what I can't understand is how they got his ssn? Do you know how many Brian Ford's there are out there? My guess is that Citibank or someone must of linked his ssn and info to my account when he applied for credit at Macy's (using the visa that I gave him as a requirement for instant credit). That's the only way I could think of.
My thoughts: How the hell do they get people's info like that? What if he never applied at Macy's? Citibank did ask for his ssn when I ordered the card but I told them that I didn't have it so they said that it was o.k. That just blows my mind...
So, now that my boyfriend and I have concluded that his credit is what it is today due to me adding him on my account as an authorized user, he has decided to help me out (since my credit is in the gutter right now) by adding me on to his Am/Ex Gold account which is in perfect standing...I just got the card today!
My thoughts: I am hoping this will improve my credit standing. Am/Ex did ask him for my ssn and birthdate wich I provided.
RE: In Addition.....
To address some of your specific points:
A creditor or CRA doesn't need your SSN. If they can match a name with and address or DOB, they assume they have the correct person. I'm assuming that you lived with your ex- so that your former address would match on of his addresses and that's how they matched you to him.
I would say that this is the same thing that happened in the Macy's (ick) Citibank scenario. They took the closest match.
I got my partner an Amex Gold off of my Platinum Card. They asked me for his SSN and DOB and I question why they needed this info since I was the one who was obligated to pay the bills. They said it was no problem and sent a card along anyhow. He uses his middle name generally so that's how I got the card for him. Now that he's in the CRA's files under that name with an Amex with a platinum acct # and no SSN or DOB, the preapproved offers have just been pouring in. Little do they know he had a chapter 13 three years ago from the mess his former lover made before he died.
I very much agree with your point that creditors should not be allowed to issue cards AND report to the CRAs on authorized users who have not specifically consented to being given authorized user status on the card.
Contrary to what the boob told you on the phone, it DOES affect your credit. One of the reasons the lawyer in the case I mentioned filed the lawsuit was that his ex-wife's BK wound up on HIS credit history from being an authorized user, and he was denied a mortgage for that. I'm sure those account are included in your FICO score as well. If they weren't your boy friend wouldn't be getting those credit cards. Most of the preapprovals and instant approvals are done based merely on the score.
Another funny story...
Here is my story:
I use to add my wife as an authorized user on
all my accounts. I have a clean but short
credit history... Now my wife received a
preapproved offer from Providian, on her
name, for a gold card with $1k limit.
And SHE DOESN'T EVEN HAVE A SSN YET!!!
She has just adjusted her status here and
she hasn't received her ssn yet... so she
cannot take the offer.
And i'm sure that i didn't give out any info
but her name when i ordered her cards
The funny thing is that a year ago i would have killed for this card! There's no justice
in this world!!))
(just kidding, i'm glad for her)