Authorized User Collections

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Mark Cappel

UpdatedSep 16, 2024

If the main card holder dies, will I, as an authorized user, be responsible for the debt now?

Due to the death of main card holder being an authorized user I was made the responsible party to pay balance. I called the card company and they said it would be paid off but when I got the answer back being a natural death would not pay. I had an accident and cut my hands could not work for over 3 months but being self employed not qualified for payment. I could not get insured on the debt protection a few years ago because I was only a user of the card. I find I'm still being charged over $100.00 month for the coverage even though after not getting help when I first needed it I ask to remove it but that and interest is all that being charged to the account. What can I do to have a credit for the charges of insurance and get this to where I can manage to pay a large part of all before something happens. I'm over 70 years old and would like to try and settle this if possible. Thanks

Generally speaking, an authorized user is not legally liable for the charges on a credit card, as the authorized user never signed a credit contract with the credit card issuer. While a credit card company can, and in many cases must, report the activity on a credit card account on the credit reports of the primary cardholder and all authorized users, only the primary cardholder is legally liable for charges on the account. If, when the deceased cardholder applied for the card, you also signed the credit application, you may be a co-cardholder, and therefore may be liable for the debt. However, if the person who applied simply requested an additional card for you, and you did not sign an agreement with the card company, then you likely are not legally required to repay this obligation.

Credit card companies and debt collectors frequently try to pressure authorized users to pay on accounts after the cardholder has passed away. Sometimes they even misrepresent the authorized user’s legal obligation to repay the debt, implying that the authorized user is legally liable for the debt. I strongly encourage you to consult with an attorney to determine your potential liability for this debt, as issues such as community property (if the late cardholder was your spouse) and whether or not you have used the card since the cardholder’s death may affect your liability. Frequently creditors try to mislead people, telling them that because they have made payments on the account, they are now liable for the debt; however, if you are not otherwise liable for the debt, simply making a payment on the account does not make you legally responsible for the debt.

If, after consulting with an attorney, you determine that you are not legally liable for this debt, you should consider notifying the creditor that you are not responsible for the debt and that you will not be paying it. In addition, you may want to send a cease communication demand letter to the creditor to stop any collection calls you have been receiving. You can find a sample cease communication demand letter at the Bills.com Debt DIY page. Hopefully, taking these steps will stop any further collection activity on the account. If the creditor or its representatives continue to call you after you have notified it that you are not liable for the debt, you may be able to file a lawsuit against the creditor for violating your rights under state and federal collection law. Again, you should consult with an attorney about what steps to take if collection activity continues after you notify the creditor to cease its collection efforts.

I encourage you to visit the Bills.com Debt Help page to learn more about debt and the options available to those struggling with their bills. In addition, the options described on this website may be able to help you if you determine that you are legally liable for this account. I wish you the best of luck in your efforts to resolve this debt, and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

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10 Comments

BBill, Apr, 2010

Collection accounts are bought and sold for a tiny fraction of the face value of the balance due. Perhaps your grandparents are already doing this, but in their next cease and desist or cease communications letter to the pestering collection agent, add a succinct and clear explanation why they are not paying the debt so that when the next collection agent buys their collection account for a few cents, the new collection agent will realize the account is worthless, and will throw the file in the trash.

GGreg, Apr, 2010

My mother got added as an authorized for a credit card without her knowledge. The account owner stopped paying the bill and bill collectors are now harrasing my parents. They have sent three cease and desist letters but everytime the debt is sold the collectors call. How can I get that to stop?

BBill, Apr, 2010

The district attorney will decide whether to file criminal fraud charges against you, and if your facts are complete and accurate I do not see much of a case. Your grandfather has the option to try to file civil charges, and there I do not see a case either. I hasten to add that I know only the facts you offered here, and do not know your state of residence, which may have rules for fraud that differ from the common law. Therefore, consult with an attorney in your state who has experience in tort litigation to learn a more precise answer regarding your rights and potential liabilities.

ssandra, Apr, 2010

5yrs ago during a divorce my gma added me as a auth user for legal fees and if needed for bills,etc.she also helped me refi home and car to get me set&free from ex.In2008 she passed,my aunt stepped in as p.o.a. for gpa and went over all with me&told me to keep making pmts&left house and car alone,my gpa has remarried,he went to get loan recently and it showed in his credit,apparently it was not a new card but an existing card that she added me to.i was never removed,had always made pmts&was under impression that it was same as my house and car(just me&my gma names)it has escalated to where he is threatening fraud charges against me.i do plan to continue pmts(have all info to show i have been paying) and pay it off and obviously wont use it again but am worried over his threats....

BBill, Mar, 2010

It is unclear to me if there was a balance on the card in question when the account owner died. If so, that balance is the responsibility of the estate. If there was no significant balance and you incurred all of the charges, then I would argue that you are responsible for that debt. However, as I mentioned to Gary on this page on 12/15/2009, there may be law in your state to contradict my analysis. Assuming you are responsible for the debt and that it is causing you distress, see the Bills.com resource What Are My Debt Consolidation Options? to learn what steps you can take to resolve the debt.

CChristina, Mar, 2010

I was the authorized user on my folks credit card and they have both passed. My sister sued us for the house and we bought her out and in the process I needed and used the card and have been making the payments without exception since but now it has become impossibe the interest is 23%. I have nothing in savings and took on a mortgage with my brother to keep the house (which was free and clear before the law suit now he and I co-own). I am desperate and need to do something , I get calls s from "debt specialists" saying they can lower my interest rate to 6.9% or they can cut my debt in half if I stop paying they will represent me legally to the bank etc, something needs give, any suggestions?

BBill, Dec, 2009

Had you ceased to use this card the moment of the account holder's demise, I would agree with your analysis. However, apparently you continued to make charges on the account, and started to make payments. You closed the account. In other words, you acted as if you were the owner of the account. Are you prepared to stand in front of a judge and say you have no liability for your deceased father's American Express account on which you made payments and charges and acted as the owner of the account after his demise? In my opinion, your argument that you did not sign the agreement is overwhelmed by your actions, namely that you accepted to the terms of the account's agreement constructively. The creditor has a promissory estoppel argument, which can be used as the basis of a cause of action for damages. However, I urge you to consult with an attorney in your state who has experience in consumer law. There may be significant case law or statutes in your state that contradict my analysis.

ggary, Dec, 2009

my dad added me as an authorized user on his american express card when he passed away i contuned to use it but made the monthly payments and in fact made almost triple what the monthly payment was. i got a letter and was advised that the payment was going up or i could cancel the accout. i cancelled the account but missed a payment the acct went to their collection company they use now want full payment of the acct. as only the authorized user and I never signed up for the acct i am i responsible for the balance of the account or not. they have nothing with my signature showing me as a co holder i was just an authorized user.

BBill, Aug, 2009

Assuming the non-profit is a corporation, you as a board member can act on behalf of the corporation, including opening lines of credit, signing agreements, and so on. I would be very curious to learn about the language of the agreement you signed with the credit card company. You need to resolve if you are a guarantor of the credit card. If so, then you need to work with the board to transfer that liability to the corporation. If you can't, then you need to close the account.

JJoe, Aug, 2009

I was on the Board of a non-profit and opened a business credit card in my name. I left the Board, but forgot to cancel the card. The agency continued to use the card. Turns out the director racked up thousands in personal expenses. The agency found out, fired the director, but left the account open and allowed her to make payments on the account. They never told me about anything after I left, and I never got any of the bills. Who is liable for charges? Who committed fraud?