My wife had a brain aneurysm, which caused a serious memory impairment. She was found disabled and approved for Social Security income. I am her SSI representative and must manage all her financial affairs. We have had a clear understanding that she is not to apply for credit cards, but she’s secretly gotten several cards with high limits — even though she has only about $500 in SSI per month and no checking account of her own. She hides the credit card bills and doesn’t pay them. I don’t know what’s happening until she has charged thousands of dollars.
When I was employed, I would call the card company, explain the situation and pay off her cards. Now that I am retired and on a fixed income, I cannot continue to pay. The companies that are giving her cards have been notified about her medical condition and are aware of her no-payment history. About six months ago, I decided to break the cycle and not pay off her credit cards. When the card companies started calling, I explained that they should have checked her credit history and questioned why they would give a card to someone who has no checking account of her own, who is disabled and who is on SSI. They have now turned her debt over to a collection agency.
Is what they are doing against the law? Can I sue them for the continued financial stress they have caused me? I have paid probably $50,000 in the past 20 years and am now in the process of getting power of attorney over my wife. For now, she’s still getting offers for credit cards, even with her poor credit. – Dan
Financial institutions are not omniscient. While you have the inside scoop on your wife’s physical and mental state, all they have to go on is the information she provides on the credit card application, as well as what’s listed on her credit reports and the credit scores that are derived from that data.
These financial institutions also expect the applicant to be truthful. So when she filled out the paperwork, she may not have written down the correct amount of money that she’s bringing in. If it looked like she made a decent income and her credit history was good, that was probably enough for them to approve her for an account.
So on to the credit card issuers’ behavior. Are they acting lawfully? It sure sounds like they are. Your wife did apply for and receive the cards, and then she ran up the bills but didn’t pay. They tried to get her to send the money using legal and normal tactics, including demanding phone calls and letters. Eventually they had to do something with the outstanding balance — either sue her for nonpayment or sell the debt to a collection agency at a loss. They chose the latter. None of this is a surprise, and it’s certainly not abusive. Regarding you suing them for damages, I’m not an attorney, but I don’t see any grounds for a lawsuit.
But I don’t believe that you are liable for your wife’s debt, either. If she took the cards out in her name only and you don’t live in a community property state, her separately owned accounts are hers only.
As far as the collection agencies go, they will do what they can to get you or your wife to send a check. That’s the nature of their business. They do have to follow the rules, though, and most of the time they do. These third-party companies must heed the federal Fair Debt Collection Practices Act, which sets the standard for how they are allowed to communicate with their “customers.”
For example, collectors cannot threaten to sue when they have no intention of taking that action and can only call during reasonable hours. Also, people who owe them can send a cease-and- desist letter, which will either stop all communication or force the collector into starting legal proceedings. If your wife has no wages to garnish (private collectors can’t seize Social Security disability funds) or property to take, it may be something you want to do.
In the meantime, I’m glad you are in the process of getting power of attorney. Your wife should not be getting any more credit cards and, this way, you’ll have control over the situation. I also suggest removing both of your names from prescreened credit card solicitation lists by calling 1-888-5-OPTOUT or by visiting www.OptOutPrescreen.com. Doing so will greatly reduce the number of credit offers that are mailed to your home and inhibit your wife’s ability to apply for more cards.
One final note: If the cards your wife applied for are in her name only, the nonpayment of the accounts should not affect your credit score. However, the silver lining here is that by choosing to not pay your wife’s card bills this time, you have effectively tarnished her credit, which is a good thing. Any future creditors will be able to see those nonpayment notations on her credit report and will most likely refuse to issue her any new credit if she ever decides to apply for another credit card without your knowledge or consent again.