Credit Card companies and MIL's death

[mommyof4]

OK, I know that the Credit Card industry is less than ethical at times, but this one beats all. My husband's mother passed away in December, and he was appointed by his brothers and sisters to settle the estate. One of his jobs in this capacity was to contact the credit card companies and settle her bills. One of the CC companies just cancelled the debt and called it good. The other one had an 8K balance due, but agreed to settle for 4K. My husband paid the 4K to the company out of the estate money, and thought everything was good. He just pulled his credit report the other day, and it turns out that BOTH of the CC companies reported the loss on HIS credit report. Apparently, they listed him as an "authorized user" on the accounts, since he was settling the accounts, and then reported them to the credit bureaus as partial charge offs. His FICO has taken a 50 point hit from this. So far, both credit card companies are not cooperating with him in getting this fixed.

Any ideas as to what to do? Don't say "get a lawyer," as my husband IS a lawyer, and he's still having no luck dealing with this.

[Viki63]

The AARP Bulletin's March issue has an article on this under "Scam Alert: Bill collectors prey on grieving families."
Apparently there's a thriving scam in hitting up the families of deceased people for sometimes even non-existent bills. To protect yourself against this scam, they suggest: know your obligations - unless you're a cosigner, you're not responsible for the deceased's debt.
Know the procedure - collection agencies should go through the executor, not contact a relative (ok, sounds like your husband was the executor).
Get the facts - require the agency to furnish proof of the debt.
Do an identity check of the agency - check the Better business bureau.
All of these are obviously closing the barn door after the horse is gone, in your case.
They do suggest contacting David DuMond, an Indiana lawhyer specializing in collection law.
Or maybe the attorney general's office in your state.
Good luck.

[mommyof4]

Thank you, Viki. I'll pass that along to my husband.

[dixieagle]

If he was an official "authorized user" of her credit cards (quite common, with elderly parents) then it is, indeed, typical that the debt would show up on his credit report, as well. I was an authorized user of two of my late MIL's accounts; they did not have any remaining balance, but they are, still, on my credit report, though one of them closed the account after her death. (For that matter, as an authorized user of my husband's AmEx account, it is also on my credit report, and that of our two daughters, who are also authorized.)

That's why it is so important we keep up with our credit reports; we can see each of them, for free, once a year, so there is no reason to be surprised.

https://www.annualcreditreport.com/cra/index.jsp

Good luck with this!

[msugeotech]

Let's think about this - I think perhaps the terms "authorized user" and "account holder" are being used interchangeably, when they aren't. The person(s) responsible for the debt are the ones who opened the account and signed the terms of agreement. (Perhaps the fine print says something otherwise). Once the account holder is no longer living, that person's estate is responsible for settling the debt, and as the executor - that's what he did. Unless he is listed as one of the joint holders of the account, I don't see why he would be personally affected by the credit companies.

Does he have anything in writing from the credit card companies regarding the terms of settlement? I'm hoping to see the terms "payment as settlement in full" on there somewhere. I'd also contact an attorney - he probably has a buddy - who specializes in that field. Just because he's an attorney himself doesn't mean that's his bread and butter. And I say that, not negatively, but sincerely. I'm a civil engineer specialized in soils and foundations, I couldn't tell you the first thing about environmental engineering even though they're both sub-disciplines of civil engineering. It's just not my "bread and butter".

It sounds like he's going to be in for a nasty battle of letters and phone calls. He can start by disputing the entry on his 3 credit reporting agencies to get the ball rolling. They'll investigate the claim, and either validate it or remove it. If they don't remove it, then he'll have to go directly to the credit card companies to straighten it out.

[dixieagle]

Originally Posted by msugeotech

Let's think about this - I think perhaps the terms "authorized user" and "account holder" are being used interchangeably, when they aren't. The person(s) responsible for the debt are the ones who opened the account and signed the terms of agreement. (Perhaps the fine print says something otherwise). Once the account holder is no longer living, that person's estate is responsible for settling the debt, and as the executor - that's what he did. Unless he is listed as one of the joint holders of the account, I don't see why he would be personally affected by the credit companies.

Does he have anything in writing from the credit card companies regarding the terms of settlement? I'm hoping to see the terms "payment as settlement in full" on there somewhere. I'd also contact an attorney - he probably has a buddy - who specializes in that field. Just because he's an attorney himself doesn't mean that's his bread and butter. And I say that, not negatively, but sincerely. I'm a civil engineer specialized in soils and foundations, I couldn't tell you the first thing about environmental engineering even though they're both sub-disciplines of civil engineering. It's just not my "bread and butter".

It sounds like he's going to be in for a nasty battle of letters and phone calls. He can start by disputing the entry on his 3 credit reporting agencies to get the ball rolling. They'll investigate the claim, and either validate it or remove it. If they don't remove it, then he'll have to go directly to the credit card companies to straighten it out.

While he is not personally liable for the debt (his mother's estate would be) as an "authorized user" any activity, good or bad, will be reported and show up on HIS file, as well. This is routine, and, though a few lawsuits have been filed, it happens all the time, often ruining credit of those who are not even liable for the debt. This is by no means an isolated occurrence, or even considered a mistake. Here is an excellent link:

http://www.bcsalliance.com/z_authorizedusers.html

And, by the way, paying off debt such as his mother's WILL NOT - I repeat - NOT "repair" his credit score. The information will stay on his report for 7 years, or until he manages to badger the credit card companies into removing the information. The above link raises very interesting ethical questions about whether credit card companies do this specifically in order to extract money from individuals who have NO legal responsibility to pay off a debt.