Laid off, stuck with company credit card bill
Corporate card bills aren't your problem, even if a debt collector says so
By Todd Ossenfort
The Credit Guy
Dear Credit Guy,
was recently downsized by my company and have started getting calls regarding
the company card that was not paid in full by the company. I am receiving calls
from a credit collection agency regarding this bill, and they are stating that
I am financially responsible for the corporate card, and if it's not paid, it will
negatively affect my credit. This card was used solely for company business and
entertaining pharmaceutical clients. The card does not show on my credit report
as an open account, but if I refuse to pay this account, will this be reported
against my credit file?
condolences on your job loss. You are, unfortunately, far from alone. The last
thing you need during this stressful time of unemployment is to have the added
worry of receiving collection calls regarding your company credit card. Talk
about adding insult to injury!
Fair Debt Collection Practices Act provides certain rights to consumers who are
being contacted to collect a debt. One such right is that you can require the
collection agency to verify that the debt is yours. Send a written dispute to
the collector within 30 days of the initial contact regarding this credit card
and the collector must provide to you verification that the debt is yours.
Also, the collector must cease collection activity once notified of your
dispute until the debt is verified.
corporate credit card accounts are set up so that employees can access the
company's credit. The typical way to handle these accounts is that employees are added as authorized users on the accounts and receive a card with both
the employee's name and the company name on the card. Unless you remember
signing a credit card agreement where you would be solely responsible for the
charges made on behalf of your former company, it is likely that you are only
an authorized user on your account. As such, you are in no way financially
responsible for the balance on the account.
the collector make good on the threat to report the account to the credit
bureaus in your name, the report would not be accurate and you would need to
dispute the item with the credit bureaus that report it. Dispute the item as
"not mine" with the credit bureaus. The credit bureau must remove the item if
it finds no proof the account belongs to you. I would also report the
collector's actions to the Federal Trade Commission, which enforces the rules
of the Fair Debt Collection Practices Act.
you did sign for a card in your name that you used for company expenses, but
for which you are ultimately financially responsible, then you may need to pay
the collector to protect your credit. When looking for a new job, you will want
your credit to be at its best, since many employers check credit reports when
making hiring decisions. I would only recommend paying the collector, however,
if you can afford it. I would also recommend that you refrain from agreeing to
be financially responsible for company expenses in the future.
care of your credit!
See related: Know your rights: Fair Debt Collections Practices Act, Debt collection sample letters, When debt collectors don't play by the rules
Todd Ossenfort is the chief operating officer for Pioneer Credit Counseling in Rapid City, S.D. Pioneer Credit Counseling has been a member of the Association of Independent Consumer Credit Counseling Agencies since 1997.
The Credit Guy answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to The Credit Guy.
Published: April 27, 2009