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Authorized user charges $2,500 on account owner’s credit card: Money Matters

September 5, 2018

Authorized user charges $2,500 on account owner’s credit card: Money Matters

Q: I’m writing to make your readers aware of a convoluted hazard with credit cards and, specifically, the credit limit imposed by the bank on your account.

Some time ago, I added someone as an authorized user for my Chase Visa account. At the same time, I reduced the credit limit to $1,500 so as to limit my liability if this person were to misuse the card. (I specifically told the customer service representative why I was lowering the limit and he assured me I was protected.)

Well, recently my relationship with this person became strained, and excessive charges on my account did indeed happen. I was shocked to see a balance of nearly $2,500 on my credit card before I closed the account, when I assumed the transactions would be denied after the $1,500 limit was reached.

After calling Chase and, of course, talking to many people, their consistent response was that I did not have a credit limit on my card. What I had was a “credit access line”. This credit access line permitted the bank to allow, at the bank’s discretion, any transactions above and beyond the $1,500 credit limit that I thought was in place. Even while looking at my Chase app on my phone, which clearly said “Credit Limit $1,500,” I was told that I did not have a credit limit on the account.

Unfortunately, these were all legitimate charges made by an authorized user for the account. Therefore, Chase told me I was responsible for all of the charges and they could not waive any of them. My only recourse was to work with the merchants to refund any charges, but that is unrealistic given the state of my relationship with the authorized user who made the charges.

Please share this story with your users, especially for those with authorized users on their accounts and hoping that a credit limit will prevent any excessive use of the card, when in fact, the credit limit may not be a limit after all!

K.E., Lyndhurst

A: I’m baffled that anyone would allow an authorized user on their credit card account that he or she didn’t trust, whether we’re talking $500 or $1,500 or $5,000. If you were trying to help this person build a credit history, you can add someone to an account without the person having an actual credit card or even the account number.

Instead, it sounds like you allowed this person to use your card and you trusted him or her, sort of. Not really. Not much at all.

If you had something in writing that your request to lower your card limit to $1,500 was enacted and that charges that took the balance above that wouldn’t be allowed, you might have recourse with Chase.

Otherwise, I’d strongly urge someone to avoid a situation like yours. It’s fine to add someone as an authorized user, especially if it’s someone in your household (like a son or daughter who’s trying to build credit), and as long as you have guardrails in place.

Those guardrails would include:

Checking your balance and transaction history regularly -- daily wouldn’t be too often. It’s super easy and fast in this age of online accounts. It takes me about 20 seconds to pull up an online financial account.Setting up alerts on your account. You can choose to get text or email alerts of every transaction or transactions over a certain dollar amount, and you can get alerts if your balance hits a certain threshold. We should all have these on any financial account, whether a deposit account or credit account.

I agree we may not be as nervous adding an authorized user to an account with a $1,500 limit as one with a $10,000 limit. Regardless, we need to take steps to protect ourselves, as your situation demonstrates.

Q: I received the following email and don’t know what to do:

“Hеy. If you rесеived this message, thеn you need to transfer 0.5 bitсoins tо thе рursе 1D5vou8a3HxUDoUaJi31yQtkoBGz62Ytyk otherwisе yоu will rеcеivе this lettеr pеrmаnently until уоu transfеr 0.5 bitcоin.

Whу аm I dоing this. A vеry gоod persоn is sеriоusly ill but cаn be sаvеd, surgerу and mеdiсines will cоst а verу lаrge amount of $ 1,349,590. Everуоne turned аway frоm him and nо one wаnts tо help. Until the right аmount оf mоney is сollеcted, I will sеnd you thеsе mеssаgеs.

If уоu want it to stoр soоner thеn trаnsfеr 0.5 bitcоins. I alsо do nоt like this, but I will not аllоw the dеаth of а pеrsоn bеcausе of thе indifferеnсe оf рeoplе аnd gоvеrnment thаt do not help аt аll.”

What do you recommend?

N.N., Berea

A: Do nothing, except add the sender to your “junk” or “spam” rules. Don’t reply, don’t call any numbers, don’t be curious, don’t take the bait. You could also set up an email rule to automatically delete any future email from this sender.

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