Authorized users aren't liable for card debt

The Credit Guy columnist Todd Ossenfort
Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly "The Credit Guy" column, answering reader questions about credit counseling and debt issues.

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Question for the expert

Dear Credit Guy,
I am getting calls from credit card companies for accounts where I was an authorized user. The primary cardholder stopped paying the credit card bills. The companies are saying I am responsible for this debt also. Can they garnish my wages or make me pay these bills? I do not even have the cards anymore. The primary cardholder took them two years ago. One more question, can credit card companies garnish Social Security checks? -- Andrea

Answer for the expert

Dear Andrea,
The crucial component in determining if you are financially responsible for the credit card accounts is whether you are an authorized user or a joint cardholder. If you are an authorized user on the accounts, as you have stated, then you are not financially responsible. You may now be asking, "Why is the creditor contacting me?" It is not unusual for a creditor to contact an authorized user when the owner of the account does not pay in hopes that the authorized user will pay, but that does not mean that the authorized user is actually responsible and must pay.

A credit card account owner has the option with most credit card agreements to add authorized users to his or her account. The authorized user is issued a card in his or her own name, and the account owner agrees to be financially responsible for the user's charges on the account. Authorized users are a convenience for the account owner who wishes to allow a spouse, child or other person access to the credit card account. However, the account owner is responsible for all account activity generated by any and all authorized users.

When you are contacted again by the credit card company, ask to speak with a supervisor. Explain to the supervisor that you believe you are only an authorized user on the account and, therefore, not financially responsible. If the supervisor indicates that you are a joint owner of the account, request that the company send you verification that you signed the cardholder agreement as a responsible party. Once you request verification of the debt, the Fair Debt Collection Practices Act (FDCPA) prevents the credit card company from continuing to try and collect from you until you receive the verification. Should you receive a call from them before you receive the verification, you might remind them of your rights under the FDCPA and politely request they not contact you again.

Unfortunately, the creditor can report the accounts to the credit bureaus and if it does, the negative information will likely affect your credit. But, the creditors cannot legally collect from you for the debt on the accounts if you are an authorized user. You can take steps to dispute the charges if they appear on your credit report.

Of course, if you find that you are mistaken and you did sign as a joint owner on the accounts, you would be financially responsible and, yes, the creditor could sue you in court. If you lost in court, a judgment could be ordered that could be used to garnish your wages. I suggest that you make arrangements to repay what is owed long before the process reaches the point of suing you in court.

To answer your last question, no, unless the debt is owed to the IRS, child support, alimony or some other government-backed debts, Social Security benefits cannot be garnished.

Take care of your credit!

See related: Know your rights: Fair Debt Collection Practices Act, How to dispute credit report errors, Can Social Security benefits be garnished over card debt?, What types of income are protected from wage garnishment?

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Updated: 02-15-2019