Company threatens to use cards on file without authorization

[Cedie63]

What is the name of your state (only U.S. law)? Virginia

My daughter owes a company money. This dept was originated in Arkansas. She is unable to pay due to lack of employment, but also can not file bankruptcy as she did this 2 years ago. This company sent her a letter stating they have the right to charge the dept to any of the cards on file previous payments have been made with if she doesn't pay by a certain date.
Is this legal? I have never heard of such a thing.

 

[adjusterjack]

It depends on what agreement she has with the company and why there are several cards on file with this company.

I would hope that she would have the common sense to call all her credit card companies, cancel the cards, put a fraud alert on them and get a replacement card with a new account number ASAP so any attempt to use the old cards will be refused.

 

[Cedie63]

Thank you.

It depends on what agreement she has with the company and why there are several cards on file with this company.

I would hope that she would have the common sense to call all her credit card companies, cancel the cards, put a fraud alert on them and get a replacement card with a new account number ASAP so any attempt to use the old cards will be refused.

It is a cell phone company and I sometimes made a payment for her, so both our cards are on there. I did advice her to close the card account, but she feels the bank would refuse a payment for such an amount anyway. Even so, I'm afraid she would end up with INSF charges in the least. But I was just wondering that if they were to take such a step if she would have legal rights. The "pay by" date is already past and she just received the letter today as they did not have her current address. So I am a bit concerned about what we might discover when we call the banks tomorrow.

 

[adjusterjack]

I was just wondering that if they were to take such a step if she would have legal rights.

Depends on the terms and conditions of her contract with the cell phone company. She should read it to see if there is anything in there about it.

Most people are surprised to learn that if you have a credit card and savings/checking with a bank the bank can take the money out of the savings/checking account if one defaults on the credit card. It's called right of set off.

There may be something in her contract that authorizes the cell phone company to continue charging the credit cards if the payments aren't made. I don't know, I haven't read the contract. She should.

 

[Cedie63]

Depends on the terms and conditions of her contract with the cell phone company. She should read it to see if there is anything in there about it.

Most people are surprised to learn that if you have a credit card and savings/checking with a bank the bank can take the money out of the savings/checking account if one defaults on the credit card. It's called right of set off.

There may be something in her contract that authorizes the cell phone company to continue charging the credit cards if the payments aren't made. I don't know, I haven't read the contract. She should.

Yes, I see what you're saying. It makes sense. Thank you!