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Laid off, stuck with company credit card bill

Summary

If you are an authorized user on your company card, then you aren’t responsible for payment, but that might not stop collectors from harassing you for it.

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Question for the CreditCards.com expert

Dear Credit Guy,
I 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?   — Rob

Answer for the CreditCards.com expert

Dear Rob,
My 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!

The 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.

Many 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.

Should 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.

If 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.

Take 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

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