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NSW Debt Recovery Chasing Me for Corporate Credit Card Transactions?

Discussion in 'Debt and Bankruptcy Law Forum' started by Rostos, 3 December 2017.

  1. Rostos

    Rostos Well-Known Member

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    Thanks for the reply

    I think your example regarding the stealing of a credit card shows the crux of the matter. In your example, something unlawful happen, ie, a credit card was stolen.

    In my example, nothing unlawful happened. This is my issue. If nothing unlawful did happen, why should I be penalised?

    In fact, the party that did raise the dispute is acting unlawfully.
     
  2. Rob Legat - SBPL

    LawTap Verified Lawyer

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    Yes, but AMEX doesn't know that and the process used to reverse the transaction doesn't know that. I'm sorry I'm not giving you the answer you want to hear, but it is what it is. I can guarantee you that you'll have a better chance getting the money out of the company than you will trying to change the payments system.
     
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  3. Rostos

    Rostos Well-Known Member

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    One has to ask, what is the dispute? What exactly is it?

    Unauthorised payment? The director that made the payment was still a director and was authorised to use the account? The transactions? Every single transaction was made as instructed by the other director and there is proof of this.

    So basically, what you are saying is, I can now go to my bank and raise disputes left right and center and have every single payment that i made to vendors, businesses etc recovered and leave all such people out of pocket?

    I don't think so.

    If something unlawful actually did happen, then I fully understand. However nothing did.

    I also noticed you didn't answer my question regarding the building example.
     
  4. Rob Legat - SBPL

    LawTap Verified Lawyer

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    We're going around in circles, and it's getting pointless. However, to finalise:

    - Try asking AMEX what the dispute is, they may know. Apart from that it's guesswork.

    - You can raise disputes, and the bank will adjudicate them depending on the payment method in question. If you do it too often, they'll likely restrict or cancel your account.

    - I thought your building question was rhetorical. To answer it: Yes, I would have to pay it and then seek payment from you. For the record, I wouldn't allow that method of payment in the first place as I know what can happen.

    Unless there's something new, I don't see any point in continuing to answer the same questions rephrased.
     
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  5. DMQC

    DMQC Well-Known Member

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    While I believe Rob's answer has answered your question, I thought it might be worthwhile to comment and perhaps a different explanation, albeit with the same view, might be of some assistance to you.

    Firstly, you mentioned that Director A and Director B were the major shareholders of the Company and all transactions were made as directed by Director a and Director B - this is irrelevant and would not have any impact on your liability as a Director. Perhaps better explained as follows: If the Company engaged in unconscionable/illegal conduct that seen all three Directors personally liable, Director A and Director B would not be any more or less liable than you because of their position as majority shareholders.

    You may have sought approval from Director A and/or Director B for the transactions, but you could have used the card without said "approval". Furthermore, you stated the AMEX statement had the name of the Company, in addition to your name on the statement. I assume then, that the other two directors were not named on the statement. This begs the question why you needed approval to use a card which only your name and the name of the Company was associated.

    I agree that given the nature of the dispute cannot be established, all of these comments are guesswork. However, for what it is worth, in relation to your "building example", the builder would need to sue the customer and then pay his AMEX bill.

    The customer would never be liable for the AMEX bill, only the cost of the work done. It is therefore possible that the Customer could call his/her bank and request a chargeback based on the fact he never authorised the transaction. This would not be fraudulent AMEX would then chase the builder who would chase the customer.

    In reference to your comment about raising disputes "left, right and center" yes, you could, however the bank would likely close your account if the disputes were unfounded or fraudulent. In fact, ANZ helpfully outline instances where they will process a chargeback on their website -

    • 'Chargeback' is the term used for debiting a merchant’s bank account with the amount of a transaction that had previously been credited. There are a number of different reasons why a transaction will be charged back, but they mainly fall into two categories:
      • Where the merchant has made an error at the point of sale, for example, an expired card has been used;
      • The cardholder or the Card Issuing Company (“the Issuer”) is disputing the transaction. For example the card or cardholder were not present at the point of sale and possible fraud may have taken place.

    In this instance the "merchant" is AMEX and the Card Issuing Company is the bank which paid AMEX the funds. FYI it does not need to be a "card" transaction, the same applies to BPay and normal direct deposits.

    Hope that helps
     
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  6. Rostos

    Rostos Well-Known Member

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    Thanks for your replies...1st DMQC

    "but you could have used the card without said "approval"...But it was not. There is no transaction that is under dispute. Ie, there was no transaction that was put on that card that was not authorized by either director. No transaction on that card would have occurred if it was not for the the directors and my condition of employment.

    While I was a director, the reporting structure was that I still reported to them and essentially when they requested a purchase I would physically go and do the purchasing with the agreement that they would pay for it. This was happening for the whole term while I was employed.

    In terms of the builder example. Why would the builder need to chase the customer for payment if payment was already made in the first place? The builder would essentially have to go through the whole process due to a dispute raised by the customer even though there was no substance behind the dispute?

    And this is what the dispute essentially is by the director....Fraudulent.

    Also, please explain this to me. I was told by AMEX that the card had essentially had no limit on it. I was told i could essentially purchase a Ferrari with it. They would call me up and verify that it was indeed me purchasing the Ferrari and they would accept it as there was essentially no limit on it.
    If the cards liability was on me, why would they issue me with a card with no limit where i declared my salary was $40k and had not provided any personal assets?

    Please answer this.
     
  7. Rostos

    Rostos Well-Known Member

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    SB

    This is the funny thing...When the debt collector acting on behalf of AMEX initially called me and said that it was due to a direbt debit rejection. That is, there was never any cleared funds. If this was the case, a rejection notice would have come back to AMEX 72 hours later.

    I called AMEX 2 weeks after the payment and they confirmed the payment was cleared and the balance on the card was zero. If it was a direct debit rejection, AMEX would have contacted once it was rejected, not 5 months later. Also, snap shot of the bank statement at the time the payment was made certainly shows cleared funds.

    So it seems that the debit collector did not know the reason.

    Thanks for your time
     
  8. DMQC

    DMQC Well-Known Member

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    No worries Rostos, happy to help.

    My example was hypothetical, I appreciate this likely did not occur, it was just to help explain how chargebacks work. The transaction that is under dispute is the transaction from the bank account which paid the AMEX statement and AMEX, not a transaction on the card. AMEX would not have had a dispute raised with them, the dispute would have been raised with the bank account that paid the statement - does that help?

    I have no doubt you used the card as authorised.

    The builder would need to chase the customer for payment because the AMEX bill was never actually paid if the customer raised a chargeback with his back in relation to the transaction for the AMEX bill. Correct, the builder would have to go through the whole dispute because the customer raised a dispute that had no substance, that is why the builder should not have given the AMEX bill to the customer in the first place.

    Given the dispute is fraudulent I think you should seek legal advice about the matter. They may be able to send a letter to AMEX to cease and desist with recovery action, or you could do this yourself.

    AMEX have charge cards, they are cards where the limit is assessed at the time of purchase, not like conventional credit cards where the limit is assessed when the card is issued. You could technically get a ferrari, but you would want a very good credit history I would imagine. I am unsure what AMEX refer to in relation to extending credit for charge cards, but I am sure they have something in place. I don't think your salary of $40k would have anything to do with the limit on the corporate charge card.

    Hope that helps,
     
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  9. Rostos

    Rostos Well-Known Member

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    Thanks DM

    I suppose this is the crux of the matter. My argument is, if there is no substance behind the dispute, ie , it did not satisfy any of the reasons for the charge back, then surely I am not liable?

    In terms of the limit, again, I find it incredible that they would grant me no limit per transaction if my salary is $40k.

    Also, why did AMEX ask me numerous questions regarding the companies financial position? If I am purely liable for the card, why bother asking me such questions about the company? If the company generates massive revenues or cannot meet its liabilities, why is that relevant if ultimately I am responsible for the card?
     
  10. Rostos

    Rostos Well-Known Member

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    Ok

    So I understand the card is essentially joint and has several liabilities.

    Why is AMEX choosing to go after me when, essentially, myself and the company are throwing liability at each other for this debt. The debt was paid off and none of the conditions to satisfy a charge back were actually satisfied.

    The conciliatior will be able to see through the historical statements that the balances outstanding were paid from the company bank account. This shows an agreement was in place between myself and the company to purchase items.

    The director who made the payment was still a director and authorized to use the card. The director who raised the dispute is the one who asked me to purchase the various items as a condition of my employment. This debt would not have arisen if such instructions were not made.

    So essentially, we have a joint and severely account (company and myself) where a director and major shareholder had instructed myself to make purchases for he company to benefit the company which includes himself being a major shareholder with the agreement that the company would pay for it. The company did pay for it and he raised a dispute to chargeback the money (for no substantive reason) essentially shifting the liability from his company which he is a major shareholder to which that company is also jointly liable to me even though his company enjoyed the benefit.

    And AMEX is choosing to chase me?
     
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