Monday, November 30, 2009

When your credit's still married and you're not

Make sure all your financial ties have been severed

By Todd Ossenfort

The Credit Guy
'The Credit Guy,' columnist Todd Ossenfort
The Credit Guy, Todd Ossenfort, is a credit expert and answers readers' questions about credit, counseling and debt issues.

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Question for the expert

Dear Credit Guy,
Help! I just reviewed my credit report. I was divorced in 1999 and just found out my ex has a credit card bill of almost $30,000. This was charged AFTER the divorce. On my credit report, it states that the account owner is the authorized user. Can I be liable for this debt? Who is the authorized user, myself or my ex? I'm scared to death! -- Rick

Answer for the expert

Dear Rick,
Don't panic. The first thing you need to do is determine what is going on with this account. Is it an account that you had when you were married that you forgot about, a new account opened after you divorced or something else?

Without seeing your credit report, it is difficult to say, but if you are the authorized user on the account, you would not be responsible for the debt. However, you need to be sure. The account listing on your credit report should include contact information for the card issuer. Call the issuer and ask if you are an authorized user on the account or if you are the primary account holder. If the issuer says you are an authorized user, they cannot discuss the account with you further because you are not the cardholder.

If you are the authorized user, you need to have your name removed from the account. The main reason being that the account could negatively affect your credit if mishandled by your ex. Unfortunately, a divorce does not separate credit accounts shared jointly by two spouses. The only way to be relieved of responsibility on a credit contract that you jointly signed as a married couple is to close the account, alter the terms of the loan or, in the case of an authorized user account, have the authorized user's name removed from the account.

To have your authorized user status removed, contact the card issuer and request that your name be removed from the account. You will need to have the security information for the account to request the change. The security information for many card issuers is the cardholder's account number, billing address and the last four digits of the cardholder's Social Security number. If you cannot provide this information, you will need to have the primary cardholder, your ex-spouse, make the request.

Should you learn from the card issuer that you are the person responsible for the account and your ex-spouse is the authorized user, ask the issuer to send you verification that you are indeed the primary account holder. Because you were not aware of the account and the charges were made after the divorce, she may have opened a new account in your name and named herself the authorized user. If that is the case, your ex-spouse stole your identity, and you could report the account as such. Doing so would legally implicate your ex-spouse in a crime.

Before you take such drastic steps, however, you might let her know that you are aware that she opened an account in your name without your permission and that if she moves the balance to a card in her own name and closes the account, you will not report the identity theft. Keep in mind that until the balance is moved to an account in her name or you report the account as identity theft, you are financially responsible for the balance on the account.

One last thing: To avoid unpleasant surprises like this one, it is an excellent idea to check your credit reports once each year. You can do so for free at

Take care of your credit!

Enforcement delayed on Internet gambling ban

Credit card-wielding gamblers, regulators have 6 more months

By Martin Merzer

With a regulatory deadline hanging over their heads, credit-card issuers and others in the banking industry have been granted a reprieve -- an additional six months to comply with new rules intended to ban online gambling.

The Federal Reserve and the Treasury Department announced Friday that the controversial and somewhat ambiguous new rules, which had been scheduled to take effect on Dec. 1, won't be enforced until June 1.

Regulators delay Internet gambling law banAnd maybe not even then.

Rep. Barney Frank, D-Mass., a leading critic of the new rules, said the delay would permit legislators to press ahead with new legislation that would largely overturn the widely criticized Unlawful Internet Gambling Enforcement Act, passed in 2006.

That law, which rode to passage with little discussion when tacked onto another bill, essentially banned U.S.-based firms from conducting or assisting online gambling operations. In practice, credit card accounts are the financial vehicles used most often by gamblers to place their bets, pay their losses and collect their winnings.

The bill generally prohibited transfers of money from U.S. financial institutions to gambling sites, but it required banks and credit card networks to navigate a thicket of confusing and often contradictory definitions and rules. Among other things, it never got around to defining the term "illegal Internet gambling."

'Midnight regulations' criticized
"The Department of the Treasury and the Federal Reserve Board of Governors deserve a great deal of credit for suspending these midnight regulations promulgated by the Bush administration, which would curtail the freedom of Americans to use the internet as they choose and which would pose unrealistic burdens on the entire financial community," Frank said in response to Friday's action.

"This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law," he said.

Frank's bill, called the Internet Gambling Regulation, Consumer Protection and Enforcement Act, would establish a federal framework under which Internet gambling operators could obtain licenses to accept bets from residents of the United States.

His bill mandates thorough investigations of potential licensees and it requires technological barriers to deter underage gambling, fraud, money laundering and tax avoidance.

Quite a lot of money is at stake. Even amid all the controversy, Internet gambling remains a $10 billion-$12 billion per year industry in the United States, according to Congressional testimony and various industry experts.

Banks also seek delay
In announcing the delay Friday, the federal agencies said they were acting in response to requests from Frank, as well as from Wells Fargo, the American Bankers Association, the Credit Union National Association and a wide range of groups associated with the gambling industry.

"The agencies acknowledge some of the challenges regulated entities are experiencing with the act's definition of 'unlawful Internet gambling," the Federal Reserve and the Treasury Department said in a joint statement. "Moreover ..., several members of Congress have indicated interest in revising the Act.

"The agencies are thus persuaded that a limited extension of the compliance date for regulated entities is appropriate," the statement said.

The action was cheered by a variety of gambling interests, including the Poker Players Alliance, a group that claims more than 1 million members and has lobbied hard to overturn the Unlawful Internet Gambling Enforcement Act.

"This is a great victory for poker, but an even greater victory for advocates of good and fair public policy," said Alfonse D'Amato, the group's president and a former U.S. senator from New York in a release. "These additional months are critical to provide legislators time to clarify UIGEA and pass legislation to license and regulate poker early next year. It is our hope that another extension would be granted should the [June 1] deadline approach before these pieces of legislation can be passed."

Simply delaying the compliance date serves no interest except that of the Internet gambling enterprises that have long evaded American gambling laws ...

-- Rep. Spencer Bachus, Sen. Jon Kyl
Proponents of Internet gambling ban

Some Republican lawmakers, however, were less pleased. They sponsored the 2006 law and have consistently defended it.

"Simply delaying the compliance date serves no interest except that of the Internet gambling enterprises that have long evaded American gambling laws and will continue to do so until effective enforcement is in place," Rep. Spencer Bachus, R-Ala., and Sen. Jon Kyl, R-Ariz., said earlier this month in a letter to Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke.