Mom piggybacked on realty agent's troubled account. What now?

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for, and also wrote for MSN Money, and, and has guested on Martha Stewart Radio and other programs.

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Dear To Her Credit,
My mother is 78 years old and lives in Illinois. About seven years ago, she wanted to buy a condo, but she had absolutely no credit history. She had never possessed a credit card in her entire life. A real estate agent who had shown her a property proposed putting my mother on one of her credit cards to allow her to build her credit history. I thought this was extremely suspicious when she told me about it, but it had already been done. I don't know if she was an authorized user or a joint account holder.

For the last two years, my mother has been aggressively pursued by a collection agency for a $1,400 debt. She is in a complete panic. She never once used the card. It turns out the real estate agent declared bankruptcy a few years ago and claims to have no credit cards, but still owns a condo. The address on the debt claims are the address of the real estate agent, but with my mother's name. The correspondence is sent to my mother's actual address.

My mother is in poor health and I'm afraid all this stress might be the end of her, especially if she has to go to court. Is my mother responsible for this unscrupulous agent's debt? What recourse does she have? I would be sincerely grateful for your assistance. -- Gabriella 


Dear Gabriella,
Your mother had the best of intentions in letting herself be added to the agent's credit card. Adding someone to an existing credit card account to gain the advantages of the credit history of a long-standing account is called "piggybacking." Parents sometimes do this to help a young adult child get started, for example. It's a perfectly legal, but backdoor method to get credit history. Steven J.J. Weisman, a Boston lawyer who specializes in probate and elder care matters, says, "She should have been aware that she was not accurately reflecting her own credit history by being added to the account."

With a real estate agent urging her on, and giving assurances it was the thing to do, however, she went ahead. If she was just an authorized user, she would not be responsible for the account. The fact that she is being aggressively pursued by the creditor leads me to believe she signed -- perhaps unknowingly -- as a joint account holder.

The idea of a real estate agent adding a client to the agent's credit card account is outrageous. "No licensed real estate agent should ever add someone to his or her credit card for purposes of creating a credit history," says Weisman. "There should be liability on the part of the real estate agency for which she worked so that the woman should not lose any money. The agency should be contacted by a lawyer on her behalf."

Weisman says that one reason your mother should have a lawyer represent her is that, under federal law, anyone collecting on the debt would not be able to contact her directly. They would have to contact her attorney. This is important both to protect her case, and to shield her from more unnecessary stress and fear.

In normal circumstances, when people are joint account holders and one account holder skips out or files for bankruptcy, the other account holder has to pay the balance. This situation is different, Weisman says. " The combination of facts of an inexperienced elderly woman who did not run up the charges on the card, coupled with an improper action by the real estate agent, should be enough to protect her from liability. The most promising way to deal with this would be with the real estate agency for which the agent worked."

See related: Ex-wife racks up debt on joint accounts, If authorized user goes bankrupt, account holder's credit not at risk, There ain't no cure for the bad co-signer credit score blues 

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Updated: 01-19-2019