Authorized User Sued in Texas

[HHM]

Need some help here.

Apparently there is a lawyer in Texas that will sue authorized users on credit cards after the responsible party has discharged the debt. He makes the argument that the Authorized User benefited from the use and therefore should be held liable.

What I need to know from our TX contingent, does this work? I know it wouldn't work where I am and my understanding is that, in general, an Authorized User is not liable for charges. Is there some peculiarity in Texas law that allows this or is this just hard core collection with the attorney betting that the cost benefit of defending relative to settling is in his favor?

[blondeinmn]

Not in Minnesota. Simply a bullying tactic to get people to pay.

[flyinbroke]

Who is the attorney? As far as I can tell, Texas consumer rules are even stricter than the federal ones. Howevahhh...

If the authorized user is married to the CC holder, sounds like they can indeed be sued. Texas is a community property state. Texas’ CP laws are covered under the Texas Family Code. The TFC states that "a person is personally liable for the acts of the person’s spouse only if: (1) the spouse acts as an agent for the person; or (2) the spouse incurs a debt for necessaries. A spouse does not act as an agent for the other spouse solely because of the marriage relationship." I do believe there have been cases of spousal AUs being sued for the money.

Now if the AU is not a spouse, then I don't think there is any law here that authorizes this. Sounds like a litigator who is going to throw anything but the kitchen sink and hope that someone decides not to fight it.

[HHM]

The attorney is Chris Carnohan,

Your post is very helpful, that helps me clarify the issues. The couple were divorced before ever moving to Texas.

[justbroke]

I wonder how this works with the theoretical discharge of spouse?

[flyinbroke]

I would call it BS. They were not married when one or the other moved to Texas so CP rules don't apply.

[frogger]

So how about you have a "company" credit card from your employer and use it for company related expenses.

Company does not pay or goes bk.

Employee on the hook?

I don't think that it will fly......

[Fresh]

How do you guys in Texas treat joint account holders? [no marriage relationship, just 2 or more folks who opened an account together] I wonder if the attorney isn't thinking about this. Some of the language for "authorized users" definition currently sounds more like a joint account holder than a "traditional" authorized user. I remember in an update to one of my accounts a few years ago that the language was virtually the same AND even indicated that a signature from the authorized user was not necessary. Whether that flies for a court is something very different.

[Bell30656]

My attorney always likes a good trend setting case so I called him up and told him about this one. He says it stands no chance in court but since only a few cases make it to court he says it stands a great chance of being settled which is what the attorney probably wants.