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complicated collection...i think?!?!


Mr. White
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OK...here is the deal. a while back i worked for a company that gave all its employees an american express business card. this card was used for taking clients to dinner, buying office supplies, etc., there was even a 'personal' charge on it for buying a watch for the CEO of the company, so i spoke with everybody about it and they thought it was a good idea, so i bought the watch for the CEO for his birthday from all of his employees, just that it was under my card. aside from that the rest was business stuff...now i was told by the CEO that the company would pay for all of the AMEX bills, including the watch. anyways, later down the road...the company went under and with a lot of debt i might add...now today i am getting calls from collection agencies saying that the AMEX bill in my name is now MY debt and not the COMPANY'S DEBT? so, i am curious....how is that possible? now the collector told me that the business that i worked for had signed some sort of waiver to release all the debts on each business card onto the employee of those business cards, therefore effectively changing a business debt into a personal debt...however, i spoke with the CEO of the company and he claims that he never received nor signed any waiver and i also spoke with the collector and asked them to fax me a copy of this 'waiver' for prove of verification of the debt. yet, they won't do that and they continue to call in regards to it. my question is....does this make any sense? if there was a waiver signed, shouldn't i have a right to have a copy of it if it is putting the business debt on me? also, is this considered a commercial debt or a personal debt? because i understand that different laws apply. in general, i would just like some advice on the topic....what would YOU do if you were in my position? thanks alot! also, this occurred in missouri and the current collector is registered somewhere in canada.

thanks

Mr. White

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I'm still new here, don't know much yet(improving!), so I have some questions before I give my .02(for what its worth)as to my opinion. Was the card opened when you were hired? Did you actually apply for the card? Did you sign anything? Whos' name was on the card? Who paid the bills? Did AMEX report on your CRs? Were you put on as an AU? I don't see how the CEO could sign a waiver, putting the debt on you, without you authorizing the deal. I would try to get a copy of this so-called waiver somehow and try to see the legality of it. I know there are some great experts on this board, I'm sure they can give you some great advice.

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If you go back to American Express to see copies of the original agreements which I'm sure you signed, you'll almost certainly find that you are personally liable for all charges made to the card. Now, that may or may not have been fully explained to you but I assure you, if that is not true in your case then your case would be the exception and not the rule.

This is the way it’s done at virtually every company today which is why I’ve chosen not to get a company card where I work (we use Citi Bank Visa but it’s the same difference). It’s irritating to say the least that a billion dollar, international company has to finance its travel on the backs of its employees but that is exactly what they are dong and we let it happen if we get the stupid credit cards.

Now, it is true that your former employer is legally obligated to you for the company expenses that were put on the American Express you carry but you are just another creditor in what is probably a very long line of creditors. The really bad news is that while they are obligated to you; you are legally obligated to American Express for those charges and the fact that your company went out of business/bankrupt/never reimburses you does not change your legal obligation to American Express.

It isn’t fair and it isn’t morally right but that’s the bottom line.

I wish I had better news.

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AMEX has a nasty habit of doing that. They arrange with a company to issue cards with the company's name on them, but it truth, they are really individual cards right from the get-go. The "waiver" that they're talking about happens right in the beginning when the company representative sets up the accounts.

You may be able to wiggle out of this if the company paid the bills directly. On the other hand, if you were required to submit the bills to the company, get reimbursed, and then send your own check to AMEX...then you're probably screwed. You'd need to file as an unsecured creditor against the company to recover your money.

(Just in case, remember that AMEX can't have it both ways. If it was a corporate card, then the company is responsible for it. If it was a personal card, then the FDCPA applies),

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You know, now that I think about it, I wonder if you've got your old employee handbook. I know for a fact that the IRS requires that your company have policies governing the intent and use of those cards. If that policy exists and is explained in your employee handbook, you may have your "out" concerning liability.

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I disagree, Equalizer...whatever the poster signed dictates his personal liability or lack of it.

Whatever the employer may have put in an employee handbook or promised elsewhere; if he signed as being personally liable to Amex for the card then he is liable.

He may have recourse against his company if they were still in business and/or if they still have assets after the dust clears but as I said earlier, that doesn't change his liability to Amex.

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Having been on the receiving end of AMEX's "Corporate Card for Employee's" Policy, I can testify to the fact that they don't care what it says in the Employee Handbook. They do have two flavors: 1.) all invoices / statements go to the company and the company pays the bills and is liable for the charges; and b.) all invoices / statements got to the employee and the employee pays the bills and submits expense reports to the company for reimbursement. Originally...like 15-20 years ago...the first plan was solely on the company...but...

These days...if you read the fine print that comes with the card when it is first mailed to you, it says that should the company default, the employee is responsible for the charges on her/his card. In effect, AMEX issues personal CCs that just happen to have your company's name on it.

(There are some behind the scenes dealings going on...AMEX handles all the receipts, and provides employee by employee accounting to the company, but its still a scheme between AMEX and the companies to shift liability for certain debts off the corporate books.)

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I have no great love for Amex or any company that finances their business expenses on the backs of their employees, but I think you are barking up the wrong tree, Equalizer.

I don't see how the IRS issue, even if there is one, is going to affect the poster's personal liability (if he is, in fact liable). If there is an issue with the IRS it would likely be bwteeen the IRS and the poster's former company; not the IRS and Amex - meaning I don't see how that would get him out of his liability to Amex.

If the poster agreed (by virtue of th cardholder agreement he sighed) to be personally liable (whether he realized it or not) then I think Amex would win in any court they pursued it in.

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This issue came up in an audit I recently did. There is a law within the IRC that exempts liablity from an employee from a company credit card provided the company has a credit card policy and the charge is company related - which is why I asked about the employee handbook. Furthermore, as the IRC does require that the company have such a policy, it may be that the corporate officers are responsible for this debt that the poster is talking about - which is what happened in the audit. Even a CC company and a CA have to respect the IRS.

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There are, I beleive, some FDIC regulations dealing with federally insured banks that issue credit cards that do require "corporate cards" to be guranteed solely by the company. The bad news is that AMEX isn't one of those...and for that matter, most national cards are now set up as separate enitities that are not governed by the FDIC.

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