Death & American Express Authorized User Responsibilities

[Anonymous]

Hi.  I'm hoping someone can give me either their recent personal experience or legal experience in dealing with a death and American Express.  

I'm in the process of trying to refinance my home to be able to consolidate some revolving credit card debt.  I have been listed as an authorized user on my mother's American Express credit card dating back to 2002.  The account is in perfect standing with zero late payments.  Here's my question...I'm going through a very tough time financially and am looking at every avenue possible to reduce my monthly outflow.  My mother passed away 3 years ago and neither hers or my card has been used since but there remains a balance under my card number.  I've been making the monthly payments since her death because I know it's the right thing to do.  However, due to my recent financial situation I'm wondering if i have a LEGAL responsibility to repay the balance that's under my card number as an authorized user.  I know they are a little different than other cc issuers but it's extremely important for me to maintain my good credit.  Can American Express hold me legally responsible for the debt and subsequently report negatively on my credit report?  I know this is a long post but I can't find any up-to-date info on the topic with AmEx specifcally.  Of course their site is listing that every AU is responsible. Just need real world advice.

Thanks

[pipeguy]

Having just closed an estate I can say that creditors, especially unsecured creditors can only claim against the estate. Authorized users are NOT the primary and cannot be held responsible for the debts of the estate. It's different if you are a co-owner of the account, in which you would be responsible for the total balance, but if you are specifically and only an authorized user (who has made NO new charges since the death of the account holder, which could be viewed as fraud) you never should have paid a penny. Claims must be made by the creditor against the estate assets and there is a very limited time frame to make a claim while the estate is in probate. 

I'm sure rules will vary some based on State law, but all of my Mother's credit cards (there were not many) specifically sent me a letter saying that the "family" was not responsible for any balance. The estate administrator (personal representative) should have taken care of this - I believe if you want to press the issue, you can get any personal payments you made to AmEx refunded - I'm not an attorney, but I've spent the last year dealing with the estate process. 

One of the primary reasons you should not open co-owner credit cards, or even auto leases, is because non-co-owned debts can only be claimed against a single person (estate).

Edit - typos, as per usual

[IOBA]

I recommend you contact Amex directly.

I believe that Amex will hold YOU responsible for the charges made on YOUR card, even as an authorized user under your mother's account.

My neighbor had a work issued Amex card.  She used it for personal things.  Work found out about it and told her she had to pay the card balance directly to Amex and they closed her card.  She didn't pay Amex.  She was angry with her employer for doing that to her and had thought that the employer would pay it in full and then take deductions from her paycheck IF they ever realized she used it for personal stuff.  

Amex came after her for the amount due.  The negatives did go on her credit report.  She thought this was GROSSLY unfair since she never applied for the card and it was a work issued card.  I don't know how it was ever resolved.  The only reason I know about the negative reporting (and the other parts of the story) was because she was always complaining about the misdeeds done against her and how her credit was terrible!  A family member  was helping her rebuild her credit and was very upset over the set back.  

So before you stop paying on the card, check with Amex.

[bdhu2001]

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@IOBA wrote:

I recommend you contact Amex directly.

I believe that Amex will hold YOU responsible for the charges made on YOUR card, even as an authorized user under your mother's account.

My neighbor had a work issued Amex card.  She used it for personal things.  Work found out about it and told her she had to pay the card balance directly to Amex and they closed her card.  She didn't pay Amex.  She was angry with her employer for doing that to her and had thought that the employer would pay it in full and then take deductions from her paycheck IF they ever realized she used it for personal stuff.  

Amex came after her for the amount due.  The negatives did go on her credit report.  She thought this was GROSSLY unfair since she never applied for the card and it was a work issued card.  I don't know how it was ever resolved.  The only reason I know about the negative reporting (and the other parts of the story) was because she was always complaining about the misdeeds done against her and how her credit was terrible!  A family member  was helping her rebuild her credit and was very upset over the set back.  

So before you stop paying on the card, check with Amex.

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Jeez.  She felt like she was done wrong?  They were her personal charges and not work related.  I think her usage and if they catch me, instead of reporting the charges, could have been construed as embezzlement.  

On my old job we had check out gas cards. That were attached to key rings of our fleet vehicles. A couple of employees used the cards to gas up their cars (as well as the fleet car).  We charged them with embezzlement and it stuck.

[elim]

I'm pretty sure AMEX AU's are responsible for their own charges as the card is issued with it's own 16 digit card number.

[IOBA]

bdhu2001 - yep, she felt she was done wrong.   She eventually set up a payment plan (reluctantly) with Amex and made a few payments.  Last I heard, she stopped making payments.

Her family member that was trying to help her rebuild her credit had given her a cc as an authorized user.  Only to be used for emergencies.  Well, the  au decided teeth whitening counted as an emergency.  I encouraged the family member to take back the card.  She wouldn't.  I encouraged her to reduce the credit limit.  She wouldn't.  (eventually the issuing bank did reduce the credit limit for non payment)  After that, I stopped listening to the complaints.

Both people put themselves in that situation.  It was up to them to get themselves out of it.

I think that was great that your company charged the employees with embezzlement.  How was the documentation done that the gas cards were used to fuel personal vehicles?

[bdhu2001]

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@IOBA wrote:

@bdhu2001 - yep, she felt she was done wrong.   She eventually set up a payment plan (reluctantly) with Amex and made a few payments.  Last I heard, she stopped making payments.

Her family member that was trying to help her rebuild her credit had given her a cc as an authorized user.  Only to be used for emergencies.  Well, the  au decided teeth whitening counted as an emergency.  I encouraged the family member to take back the card.  She wouldn't.  I encouraged her to reduce the credit limit.  She wouldn't.  (eventually the issuing bank did reduce the credit limit for non payment)  After that, I stopped listening to the complaints.

Both people put themselves in that situation.  It was up to them to get themselves out of it.

I think that was great that your company charged the employees with embezzlement.  How was the documentation done that the gas cards were used to fuel personal vehicles?

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You have to check out fleet vehicles.  Vehicles have only a certain size tank.  If you start paying for 40 gallons of gas for a 20 gallon tank, there's a problem. Check for the pattern of who has the vehicle when that happens and then watch the next time they check out vehicles.  In some cases we had pictures.  In all cases we had proof that more than one vehicle was filled.  We even had vehicles being fueled when we gave them to the employee with a full tank of gas.

When you check in and out vehicle you have to list the mileage out, mileage in, and amount of gas when you check the vehicle back in.  I worked for human services and we lived on documentation.  You have to check, because you could also have dishonest or rigged pumps, but rigged pumps would only be off by a gallon or two. Not the situation we had.

Unfortunately, when we find someone being dishonest, we usually find that they are dishonest in other ways too. There were four employees that we caught.  Two of them were also stealing gift cards that we give to Foster parents to help them meet clothing & immediate issues of children who were removed from homes. A couple of the people also felt that they were done wrong, because they had worked for the department for years.

[IOBA]

Smart!  

[pipeguy]

Corporate cards, Government Cards, Business Cards, Jointly Owned Cards - all have different terms and of course ways to deal with abuse of charge privledges. That said, "authorized users" on a private credit card are NOT responsible for the account balance if the account holder dies - the Estate is and the creditor has to make a claim against  the estate during the probate process.

In no case should an authorized user (only) be paying off the estate debts for credit cards, medical charges, etc. An authorized user that is named as the estate administrator (personal representative) by the court needs to follow the rules of probate, publishing the establishment of the estate, notifying creditors, etc but does not proactively favor one creditor over another, say because he/she was an AU on that account or because it is the "right thing to do" in their mind. AmEx gets no pass or special treatment by the courts concerning estate claims - the court sets up priority for the payment of debts, set asides and exclusions for estate - unsecured debt is not on the top of the list. 

Running up personal charges on a business or government card is not the same as being an authorized user on a personal card with a balance that goes into probate. 

Contact an attorney, the Probate Court (Register of Wills, Wills and Orphans Court, et al), or just Google the Probate process for your State for state specific rules.

From AmEx FAQ: 

By submitting this application, you are requesting that we issue an Additional Card(s) on your Account to the individual(s) whose name(s) appear(s) on the online form.

Additional Card Members do not have accounts with us but they can use your Account subject to the terms of the Card Member Agreement. You are responsible for all use of your Account by Additional Card Members and anyone they allow to use your Account. You must pay for all charges they make. You authorize us to give Additional Card Members information about your Account and to discuss it with them.

Additional Card Members must be at least 15 years of age and never had a defaulted account with American Express.

[pipeguy]

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@elim wrote:

I'm pretty sure AMEX AU's are responsible for their own charges as the card is issued with it's own 16 digit card number.

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The unique card number is a "feature" of AmEx AU cards, but that does NOT change a thing when it comes to the death of the primary holder - AU's are not responsible for repayment of charges if they are just AU's on the account. Of course if an AU runs up a ton of charges, especially unrelated charges, when they know the primary is no longer able to manage their affairs, that could be deemed fraud and could be viewed differently, but the OP didn't suggest that was the case.