Posts Tagged ‘credit’

Jimmy had just started college as a freshman and was walking through the student union of a school. He was approached by a representative from a credit card company asking if he wanted to open up a credit card. This seemed like a good idea to Jimmy, so he signed up and received in the mail shortly thereafter, a credit card with a $2,500.00 credit allowance.

Jimmy found that the credit card came in useful for buying clothes, books and just generally having a good time. Jimmy did not have a job and had no idea how he was going to pay for the first bill when it came, which amounted to close to $900.00.

ISSUE: Is Jimmy responsible for these charges?

ANSWER: No. Just recently a credit card law was enacted which made it essential for the credit card companies to change their practices. One of the key changes is that now an individual must be at least 21 years old before he can be given a credit card on his own. Anything younger than that would require a co-signature of a parent or natural guardian to be valid.

In this particular situation, since Jimmy was only 18 years old, the credit card company had violated the law and thus could not hold Jim or his parents responsible for the debt incurred.

Disclaimer: The above article is for instructive purposes only and each case is fact sensitive. Consultation with an attorney should be obtained instead of reliance upon the legal issues discussed in this column.

Mary turned on her computer as she generally did at the end of the day and found an e-mail message from the Internal Revenue Service under the subject tax refund. Mary clicked on it and found that it stated that she would be eligible to receive a tax refund of $580. Mary was requested to submit the tax refund request and allow six to nine days in order to process it. She was also told that a refund may be delayed for a variety of reasons such as submitting invalid records or applying after the deadline. To access the form that she was to fill out, she was simply advised to click on an emblem representing the IRS.

When Mary clicked on the emblem, a questionnaire came up asking for her Social Security number, her credit card number so her income tax refund could be credited to her credit card, and other personal information. Mary was excited so she filled out the information and forwarded it to what she thought was the IRS website.

After almost a month, Mary did not receive her tax refund and numerous unauthorized charges showed up on her next credit card statement. Unfortunately for Mary, she was a victim of a phishing website. Mary had become a victim of what is the fastest growing crime in the country, identity theft.

Disclaimer: The above article is for instructive purposes only and each case is fact sensitive. Consultation with an attorney should be obtained instead of reliance upon the legal issues discussed in this column.

The holiday season is here once more. The lawyers at Dougherty Leventhal & Price wish to remind you that some of the best things in life are not things at all. Celebrate your holidays bys pending time with your loved ones and be very cautious regarding the use of credit cards to purchase items which you cannot afford.

Did you know that 92% of Americans carry 5 to 6 credit cards in their wallets? Did you know that 55% of Americans have 7 to 8 credit cards in their wallets? 20% of credit card users are “maxed out”. It takes 22 years to pay off a debt of $1,000.00 if you only make the minimum payments.

If the above statistics were not enough to ruin your holiday cheer, the Federal Government has passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This new law allows banks to change the minimum 2% monthly payment on existing credit card debt to 4%. The payoff period is now 10 years instead of 20 years. For example, the average American carries credit card debt equating to $8,652.00. At a 2 % minimum payment, the monthly payment was $432.60. Now, at 4%, the minimum monthly could equate to $865.20 per month. This is not a gift you want to find under your Christmas tree.

So enjoy this Holiday Season but remember to only spend within your means so that you are not negatively affected by the new credit card laws.

Brian G. Price, Esquire