Legal Question in Credit and Debt Law in Massachusetts
credit reporting question for a secondary credit card holder
Hi,
I am the Prinicpal of a small corporation that is experiencing severe financial problems, possibly leading to closure and/or bankruptcy. for convenience purposes (buying stamps etc), my bookeeper was added last year as an additional cardholder on the two corporate credit cards, both of which are in default to the tune of approx $5,000 each. While my understanding is that the bookeeper is not liable for the debts, my fear is that my problems and debts could be reflected on her credit report, something highly unpalatable for both of us and very embarrassign for me. I received a voicemail this am from a debt collection agency that referenced my bookeeper ''going onto the public record''. Would be most interested to discover if this is true or not. As both accounts are now with credit collection agencies, I'm sure it's now too late to have her removed as a secondary cardholder from both accounts? Any comments or suggestions would be hugely welcomed. thanks peter harrison
3 Answers from Attorneys
Re: credit reporting question for a secondary credit card holder
Check the credit card policies as to liability as "additional cardholder" on debts charged by the primary cardholder.
Assuming the additional cardholder is equally liable for the debts on the card, regardless of who made the purchases, closely monitor the conduct of the collection agencies/agents to make sure they are not exceeding the applicable legal boundaries for appropriate debt collection practices. I have found that they routinely run afoul of required practices and procedures. Their phrases like, "going on the public record" are usually meaningless, empty threats designed to imtimidate the debtor. To keep them in line -- and to limit your bookkeeper's exposure to the amount for which s/he is lawfully and legitimately responsible (and nothing more) -- check the MA Attorney General's website. There is good information available detailing what collection agents can/cannot legally do. If they violate any of those requirements, complain to them in writing, referencing the information from the AG website. Doing so will probably keep them in line going forward.
If the collection agents follow the law, then your bookkeeper will only be subject to the exposure she is legally responsible for as additional cardholder, nothing more.
Re: credit reporting question for a secondary credit card holder
Here is the link to the AG page containing the Fair Debt Collection practices info sheet
http://www.mass.gov/?pageID=cagoterminal&L=2&L0=Home&L1=Consumer+Protection&sid=Cago&b=terminalcontent&f=consumer_consumer_publications&csid=Cago
Re: credit reporting question for a secondary credit card holder
It is a well settled rule of both contract and agency law that an agent (your bookkeeper) is not liable for the debts of his/her principal (your corporation). That being said, there are provisions under both the Fair Credit Reporting Act (15 U.S.C 1681 et seq.) and the Fair and Accurate Consumer Transactions Act of 2003 (FACTA) which empowers the consumer with a myriad of rights to combat inaccurate and/or adverse credit information. The law on this is tedious, voluminous and complex, but should allow your bookkeeper an opportunity to correct any problems. Please feel to contact my office for a free initial consult based on the facts of your specific situation.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
