Legal Question in Credit and Debt Law in Wisconsin
Power of Attorney liability
I had a Canadian power of attorney legal document for another person. Call him Bill. (not his real name). Bill had a financial emergency in Wisconsin, and contacted me to contact the financial institution. I contacted the financial institution, and informed them that I was Bill's Canadian power of attorney, and asked the bank to remedy the Bill's emergency. They empathized, but said that I had to prove who I was before they could remedy it. I told them that my document was from Canada, and not the USA, or atleast I assumed it was only good for Canada. They asked me to fax it first anyway. I did, someone unauthorized was debitting Bill's account. Once the financial institution received the fax, they called me, and told me that they would honor my power, and they cancelled the account as I wished as per Bill's instructions.
However, a year later, when I am no longer Bill's Power of attorney, Bill has incurred some debt in another separate matter, could the financial institution hold me liable or responsible for Bill's debts?
I was his Canadian Power of Attorney, and I only sent the financial institution this document, to prove who I was, and it stated Canada on it.
1 Answer from Attorneys
Power of Attorney Liability
I would need to review the POA (power of attorney) as well as all other relevant documents such as the bank's account holder agreement, before I could advise you. However, it has frequently been my experience with clients who are in financial trouble that creditors are quick to add additional names to loan accounts, particularly if they are in default. I see this most frequently with "authorized users" on credit card accounts (most frequently family members). They are equally quick to attempt to collect against such persons if the account goes into arrears. Only a judge or jury can ultimately determine the legality of this. If the new user does not contest the debt, it will certainly go into collection against him (and may even go into collection if he does contest it). Users of a POA (known as "attorneys in fact") are fiduciaries and can certainly be sued in their fiduciary capacity for any debt which they incur on behalf of the POA's maker. However, if they do not clearly identify themselves as fiduciaries in all of their dealings with third parties, this distinction is apt to be lost, meaning that they could be sued personally as well.
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.
