AMEX Corporate card - charge off & new account. Need help!
First time poster. Thanks in advance for your feedback!
Here's the situation. I quit a company in 2006 and left a sizable personal balance on my Amex corporate card. The account was eventually charged off and is no longer on my credit. I was recently rehired with the same company, and as a requirement, I applied for a new corp card. Surprisingly, I was approved and given a new account. I thought I was in the clear until my manager received an auto-generated email showing the past due balance and advising me to pay the balance in full. I called Amex and the account was no longer in the "Amex system" and is now with a collection agency. The collection agency said the only negative impact this could cause is to my credit (which it has been removed).
My question is this...should I negotiate with the settlement dept and pay this off? Or, since I am no longer legally responsible for the debt, and my company is not liable, it seems a waste to pay a collection agency. Also, how is my company still receiving alerts regarding a charged-off debt that is not linked to my new account. I'm curious if the email was just a warning that my manager needs to remind me of policy, etc. I have not received any bill or effort to resolve the debt directly from Amex. Is it worth contacting my program administrator and asking these questions? Of course, that would may open a can of worms.
Here's the letter my manager received: Account status is 'Collections'
A recent review of your employee’s American Express corporate card account indicates that a high overdue balance existed at the point in time the report was generated. Details are listed at the bottom of this memo. Although this balance may have since been paid, we are requesting your assistance in addressing timely submission of expenses to decrease any balance still owed to American Express and to prevent future delinquencies on the account.
Please note that if there is anything other than "Active Account" in the Account Status field, then this account has already gone to collections and must be paid in full by the employee immediately. Although American Express Corporate cards are classified as personal liability (the employee is responsible to pay the balance), there is a financial impact to IBM if the card remains delinquent.
As a manager, you are authorized to take the actions listed below to resolve this matter. Please determine the reason for the high balance, the appropriate action to be taken, and respond to this request. Note: your employee should be made aware of any action taken.
PLEASE respond to this memo by clicking the "Edit" button above the letterhead, choosing a response below and clicking the Submit button above. Failure to respond within 2 weeks from receipt of this memo, will result in follow-up memos to additional levels of management.
I have reviewed the policy information with the employee, and will take the appropriate follow up actions should future instances of policy non-compliance occur. For Example, if the overdue balance is not paid in full.
In addition, I have contacted American Express to cancel or set limits on the employee’s corporate card.*
I reviewed the information in this memo and due to the circumstances no action is required at this time.
*To cancel your employee's charge card or set limits (as low as $0) on cash advances, retail spending or overall, please contact your American Express Card Company representative.
Amexcorp, I have a problem with your statement, "I am no longer legally responsible for the debt..". Legally or not, it's personal debt that you incurred on your corporate card. It's still very much your debt. Credit is a phenomenon that we humans created to improve our lives. It changes the way we spend. That's all it does. The creditors are people (or companies managed by people) that we don't know and have probably never met, yet they're willing to lend us THEIR money to use as we seem fit. They offer us a sum (credit limit) and they give us a small piece of plastic that we can use to access those funds. They trust us. Sure, we pay them interest for using their money (unless it's a charge card) but that's the cost of doing business. Still, we gladly agree the interest rate when accepting the use of their money. Repaying these people (creditors) that we don't know and have never met is a MORAL responsibility that trumps any LEGAL responsibility on the books. If, in good faith, you can't repay, fine. File for bankruptcy and move on. Life happens. But if you can repay the debt and only chose not to because of a legal issue outside of bankruptcy then all that says is that the creditor clearly made a mistake in extending you their trust. Look Amexcorp, I really don't mean to pontificate here but if you owe the debt, pay it. Plain and simple.
Just my two cents worth.
You're using this forum exactly for the purpose that it was intended: For soliciting feedback or comments and advice from those of us who use and enjoy credit cards. Thank you for contributing. We look forward to other contributions from you in the future. And, sincerely, Amexcorp, welcome to our forum.
You should pay. I do not take the "MORAL" stance like Socelli, I look at it from a bit different angle.
Based on the information given you quit a company with "a sizable personal balance on my Amex corporate card". If you had not quit would you have paid it? Did you put the "personal balance" on the card of a company that you knew you were quitting? That does not matter to my reasoning. I say you owe it because you made a commitment when you singed the User Agreement.
You could think of it this way, by not paying this yourself you have cause others to pay for you. Any company will pass the "cost of doing business" to customers every chance they get, credit companies are just better at it than most. Amex will pass it to IBM and they will pass it to their customers. I know that by now it is likely all paid back but still you have not lived up to your commitment. So my reason is even more simple than "Morals" or "Morality". You committed to something and you should fulfill your commitments when possible.
I guess it is lucky that you work for such a big company. A smaller business may have remembered you leaving them "holding the bag" and not have hired you back on.
When they say sent to collections, they mean it was either assigned to their internal collection department or send to an outside collection agency. They probably still own the debt. You would need to pay off the balance in full for them to issue a card or have any type of relationship with them in the future.
If I were you, Id pay them. If not for reestablishing a relationship with them again, to save you from any kind of embarrassment or jeopardizing your reputation with your employer.
I think the surprising thing is the same company would hire you again after you charged off a company corporate credit card.
Just out of curiosity, what was the balance and what was your company's reaction when you didn't pay it off?
$10K. Regarding the reaction, that's really part of my question to the forum. I was rehired and didn't have any trouble getting a new card (new account, $0 balance). However, my manager received an email from Amex showing the old default balance, even though it's a separate account now handled by Amex credit dept.
UPDATE: I called Amex and asked to see a statement so I could better understand the fees and late charges that have been accessed since 2006. They told me I would have to write a letter to their account research division in El Paso. I also asked if they would consider a monthly payment option. They said they would, however, they would not put anything in writing. I wouldn't feel comfortable making a payment over the phone without having an agreement in writing. The rep was also very nasty, even though I told her I've never been contacted by Amex to resolve the debt and just wanted to see a statement before proceeding with a payment. She could have easily convinced me to make a payment had she not been so nasty. Now I'm writing the research division as a first step