American Express Never Forgets

August 31, 2010 8:24 PM

I recently applied for a corporate American Express card through work and they told me that they found an old written-off debt from 1990 under my name. How best should I handle this?

So, I got the corporate card (with a little rule-bending). I called their "special investigations department". The debt is for about $700 and is for charges that occurred between 1987 and 1990. This doesn't show anywhere on my credit report. When I asked AmEx to provide documentation that the debt was, in fact, mine, they said that they couldn't provide me with anything, and they couldn't prove that it was mine. Nor could that prove that it wasn't. They have nothing to send me, no records, no receipts, no old statements. Nada. Only a record of a debt for $700 linked to my social security number. They've never sued, or attempted to collect as far as I know, and like I said, my credit reports show nothing (not even an account from Amex from back then).

As far as I can tell, the only time that this will cause me problems is if I apply for future corporate AmEx cards. However, I've now gotten two without a problem.

I'm pretty sure, but not 100% sure, that this is left over from my free-spending ways back in college. I was deep in debt, and initiated but never completed a personal bankruptcy. I was only 20 at the time. I paid off many of my bills. Some were "charged off" or "written off". I think that the AmEx bill was one of those that was "written off", but apparently AmEx has a long, long memory.

So, the question is this: if I don't pay off the bill, there appear to be no consequences whatsoever. As I said, I'm fairly sure it's my debt, but not 100% sure. Regardless of the moral/ethical obligation, I'm wondering, is there another shoe out there that could drop, or some other way that this old debt could come back to haunt/trouble me? Is there a unanticipated financial/legal/credit consequence to not paying this off.

I'm most likely going to pay it regardless so that I can sleep easier, but I'm still curious as to whether or not there would be consequences if I don't.

posted by anonymous to Work & Money (5 answers total)

It is almost certainly outside the statute of limitations (though this can vary from state to state, 20 years is an awfully long time) so they would not be able to obtain a judgment against you. It is also too old to appear on your credit report. The worst they can do is put you on an internal blacklist, which they appear to have done, and deny you credit based on that, which they appear *not* to be doing. So no, I don't think there's another shoe, except that you may find yourself ineligible for some types of AmEx accounts that you would otherwise qualify for.

FWIW, I appear to be on Citibank's internal blacklist and they won't give me any credit, however it has been only 8 years since I charged off with them. It hasn't affected my ability to get lots of credit from other lenders, at the most favorable terms.
posted by kindall at 8:31 PM on August 31, 2010

IANAL

Do not pay it. That would constitute acknowledging the debt and could start the statute of limitations tolling again - meaning you could theoretically become liable for not only the original charged off $700, but all the penalties and interest that could potentially have accrued in the last 20 years.

This is a short summary of what I learned when I did a story on consumer credit counseling (the ccc.org) organizations. CCCs are nonprofits that are funded by credit card companies, so they basically work to find out how much of your debt you can reasonably be expected to pay back, so they can put you in timeout, then wipe your slate and get you back on the credit drip again.

Reopening ancient chargeoffs just pours sour milk in everyone's cereal - the creditor can't pretend it's forgiven you if you insist on paying a debt that has slid into the twilight.

Sounds crazy - is crazy. Contact a CCC and they'll tell you the same thing.
posted by toodleydoodley at 8:46 PM on August 31, 2010 [8 favorites]

Yeah, don't pay it. Tell them you don't remember it and make them prove it's your debt. They won't be able to.

If it were two or three years, you'd know whether it were yours, but twenty? Ignore.
posted by zinfandel at 9:37 PM on August 31, 2010

Don't pay it, until/unless they send you proof that it's yours. As simple as that. The burden is on them.
posted by davejay at 10:39 PM on August 31, 2010 [1 favorite]

Just wanted to add that if they do prove that it is yours, and you do decide to pay it, make sure you get in writing that your payment of $700 satisfies the debt completely and that they give up the right to pursue you for interest, late fees, or anything other than the $700. Get that in writing before you send them a check. And then keep that piece of paper for the rest of your life.
posted by spilon at 7:11 AM on September 1, 2010 [4 favorites]