Authorised User on Credit Card

W

Worried

Guest
I am asking this question on behalf of a friend who is in a very sticky situation.

A family member was an authorised user on his credit card, and slowly but surely fell behind with his payments. The total amount was debited each month from my friends card, so he listed a statement and requested payment. However, the balance was disputed as the person did not realise they owed so much and nothing has been paid back by the family member.

My friend called the credit card hotline and cancelled the card over Christmas so at least nothing else could be purchased. Anyway, this months statement arrived and the card has still been used throughout January despite it being cancelled. VISA could not give an explanation but could see clearly on their screen that the card had
been cancelled. The family member managed to spend another €500 on the account!

My friend has paid the full amount back to VISA and now the family member owes €5,000, which is my friends house deposit.

My friend is very upset over the money outstanding but also over the fallout with the family member, but it seems pretty obvious the debt is not going to be repaid. He tried to approach the person in a calm manner, but the person who is very pig headed would not listen and tore up all the statements.

Now it is a stalemate situation and my friend is out of pocket by €5,000 for over six months.

Has this happened to anyone else, and can anyone give me some advice.

PS Never let anyone be an authorised user on your card
 
"PS Never let anyone be an authorised user on your card" - unless it is your missus and she tells you to, of course.

But seriously, it sounds like your friend has a pretty slim chance of getting their money back. The other user (who is 'pig headed') has obviously worked out that he can get away with this by ignoring it.

I can think of two possible ways to get something back :
1) if the other person is a smoker/drinker/regular consumer of anything, you could suggest that every time they buy a packet of cigarettes or a pint or whatever, that they put aside the change. Every week they hand over the change (maybe €10, or whatever) and eventually they get around to paying off some of the debt. It might only be a fraction, but by doing this they accept that they *have* a debt. Eventually, if the financial situation inproves they might be in a position to pay off a bit more. If they are allowed get away with the view that they don't have to repay your friend, then they will *never* pay anything off and they will never recognise the debt.
2) your friend could let other people know the situation and let them put indirect pressure on the other person. This one obviously depends on circumstances, big time. If they are out for a drink with friends, family or colleagues and the other person goes up for a round, they could drop a subtle hint about being owed money to see if anyone else picks up. If they do pick up, youe friend could elaborate a bit and say they haven't so much as paid a penny back. Maybe you have had to change your holiday plans, maybe you can't give someone else a loan because you're a bit short yourself since the other person left you high and dry. It's not as if your friend would be saying (necessarily) anything untrue. If people know the person has defaulted on his debt they in turn will drop subtle hints back to the other person and this may encourage him to *start* paying back. It may also just aggrevate them too, so hence the need to take account of the circumstances.

If your friend gets the other person to accept they have a valid debt it is important to get some form of regular payment schedule. Otherwise he might find that the money just stops coming after a while and it will be back to the start again in terms of getting more of the debt repaid.

z
 
Hi Worried - I'm a bit confused by the early part of the story. Didn't the main cardholder see the list of transactions charged by the the other party on their statement each month?

Does the other party have any assets in their own name (car, house, shares) that could be targetted in any legal action?
 
Credit card

The family member managed to spend another €500 on the account

On what? Golf clubs etc. - sell them!

And what about the credit card issuer? Have they issued an apology or explanation? Negotiate with the bank on that EUR500 - maybe they will agree to let half it go given their mistake!
 
Re: Credit card

Why don't you suggest getting a CC in the debtors name this time and getting two cards. Then blow €5,000 from this account and leave him/her stuck with the debt. You can just take the money out from an ordinary ATM.
 
Re: Credit card

It sounds like the relationship is pretty much blown out of the water one way or the other.

If the debt is never repaid it will always be there like a cloud, and if your friend takes legal action to recover it that will probably end any chance of a reconciliation anyway.

It's easy to make suggestions from a distance, but if it were me, I'd like to think I'd do the following.

1. Have your friend write a letter to the relative explaining
that it looks like any chance of a reconciliation is quickly
receeding, and the only way they can avoid this getting
messy is to try to reach a compromise.

2. Suggest some comprimises. E.g.
Pay back 75% of the money in cash. Unless the person is
completely broke they should be able to get a loan, and it's
not a huge amount.

Or. Pay back the full amount over say.. two or three
years.

3. If the other party has no interest in reaching a compromise
you're friend will have no alternative but to go the legal
route, which he/she really doesn't want to do. It will be
costly, both financially, and in terms of relations etc.

4. Explain that the debt had to be cleared using a house
deposit.


Most importantly keep a copy of the letter so that if it goes the legal route you have evidence that you tried everything to reach a compromise.

Talk to a solicitor to see if there's any legal basis for recovering the debt. The courts may take the view that
the account holder is liable not the authorised user.

Definitely follow up with the card company regarding any speding after the cancellation.

-Rd
 
Re: Credit card

Has this happened to anyone else, and can anyone give me some advice.
Click to expand...

I loaned significant sums of money to siblings in the past and never got them back. I learned my lesson the hard way and from then on firmly but politely refused all requests for money from siblings and friends. This was not easy and sometimes caused a little immediate consternation but was better in the long run all round. There are no long term grudges arising from this but we all know clearly where we stand on the issue. If there were a serious and genuine emergency I would obviously relax this rule but thankfully that has never happened and all involved are (and, in my opinion, previously were anyway! :| ) financially self sufficient.
 
I'll pay you back next month.

My own son ran up debts of €3k on his credit card. My wife lent him €3k to clear his debts and clear his interest bill. Each month we have to drag the promised repayment from him. We have now accepted that no matter how much money he has or we give him he blows it immediately on crap. Every night he buys a chinese takeout and has it delivered to the house at extra cost despite having a selection of homemade foodstuffs made for him. He simply wastes money. Some people are like this and I really don't think they ever learn any better.
We still ask for the repayment though and will continue to do so until the debt is cleared.
 
Thanks for your suggestions. He has already taken the route of writing the letter setting out details of the debt and sent it by registered post. I suppose what is next is to talk to a solicitor, as I would be quite worried that as the person is an authorised user that my friend is liable for all debts and has no recourse.

Speaking to the credit card company, what they said is that although the card is cancelled, if it is used in an outlet where it is less than the retailers threshold, that the payments will go through automatically? They said this is the same with all credit cards? Does anyone know this to be the case.

My friend does not want to go the route of involving other family members as this will only lead to friction in the long run and possibly break up the family altogether. He knows that if he goes the legal route that there will never be a chance of a reconciliation.

The person involved in owing the money is (semi) retired, owns his own property and would have a pension of approx. €2,500 per month. It has also come to light that he owes other family members money although it is lesser amounts(hundreds rather than thousands). This person got their pension payout last year approx. €80,000 and this is why my friend was not initially worried that they did not pay for a couple of months. Now it appears this whole amount has been spent also.
Trips abroad, expensive furnishings, eating out, etc.

It all a big mess and is causing no end of bother.
 
Based on the fact that the debtor has significant assets, I would certainly be inclined to go after them for the money, though don't underestimate the effort/time/pain involved in getting and enforcing a court judgement. You should also get a copy of the terms & conditions of the card and review in detail the conditions about secondary cards and card cancellation.
 
As Rainyday says, get a copy of the T&C for the card and see what it says.

What the CC company said to you is technically correct in that not all transactions are verified online if they are below a certain value, but unless I'm missing something this should be a matter between the merchant and the card issuer. The fact that they don't check every transaction doesn't alter the fact that your friend notified them that the person was no longer authorised to use the card - the issuer should no longer accept charges to the account from that card holder, plain and simple in my view. But my view and the T&C may well be different.

z
 
Don't know if this is relevant or if it's even true.

A friend of friend lived in a small town 20yrs ago and his wife ran up big bills around town. Eventually he got so frustrated that he put an ad in the local paper saying that from that day forward, he wasn't responsible for her new debts. Apparently it worked and they're still married!

Could you write to the credit card company stating something similar? Nowadays, if you put an ad in the paper, you'd be sued!

Sluice
 
"Speaking to the credit card company, what they said is that although the card is cancelled, if it is used in an outlet where it is less than the retailers threshold, that the payments will go through automatically? They said this is the same with all credit cards? Does anyone know this to be the case"

This appears to be a handy cop out for the cc co. and it would appear that the only course of action is to cancel both cards and forgo the €40 Govt. charge to ensure 100% that no more automatic payments will go thru.

IMHO opinion a family meeting would not go amiss to clarify how many members are in actual fact owed money and the total figure involved. Brass neck springs to mind and the more everyone pussyfoots around this person only leaves every other family member open to financial abuse. Might sound heavy handed but have been there and you have to be cruel to be kind especially if possibly addictions (of any kind) come into the equation.
 
I, I, I, I, Me, Me, Me.

Sounds as if the guy who owes the money is a tantrum throwing bully. Who needs friends like this, even family members like this? He is greedy, selfish, self absorbed and needs a dose of reality and self awareness.
The rest of the family have been bullied by this person for years but seem afraid to do anything.
They should hold a get together and discuss Mr. Obnoxious and take the necessary measures including seeking legal advice.
When the bully has no one left to bully then he will find himself alone.
 
Re: I, I, I, I, Me, Me, Me.

I know I shouldn't make light of this situation but...

His name isn't Liam Lawlor is it?
 
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