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Ask Creditnet: Help! My Corporate Credit Card is in Collections

Dear Creditnet: I'm currently receiving collection notices from American Express for an unpaid balance on an old corporate credit card. I left the company years ago.

I have combed through all my Amex bills, corporate expense reports and reimbursements, but I've been unable to find any unpaid charges on the card. In addition, because this card was in my name and I incurred all the charges, my former employer takes no responsibility for the unpaid balance even though the charges were made solely for work purposes.

Will this affect my personal credit? What should I do now?

Answer: This is a difficult situation, but it's not one that American Express is unaccustomed to handling. Believe me, these sorts of problems arise quite often with business credit cards.

Although it may seem a bit unfair, the contract you signed when you received the corporate credit card likely places the liability for any unpaid charges on you. That's why this alleged debt has ended up in collections and they're notifying you instead of your previous employer. 

Make sure you pull current copies of all three of your credit reports to see how this is reported by Equifax, TransUnion and Experian. If the collection is showing up on your credit reports, it's unfortunately damaged your credit scores already.

I recommend speaking with an Amex customer service representative first to determine what the unpaid charges were, since it sounds like you've kept all your billing statements and haven't been able to verify any unpaid charges. Amex should be able to tell you exactly what the charges were and when they weren't paid.

You may then want to enlist the help of your previous company once you have this information in hand. Hopefully they're still in business and are in a position to respond to your inquiries. If these charges were approved business expenses that your employer agreed to pay, then they should be prepared to step up and take care of any unpaid charges.

In addition, if you're able to work things out directly with Amex, they may be willing to pull your account back from the third-party collection agency so you can make payment directly to Amex and remove any negative collection marks from your credit reports.  Remember, a "paid" collection is just as damaging to your FICO scores an an "unpaid" collection.

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Joshua Heckathorn's picture

Joshua Heckathorn was President of Creditnet, is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past ten years.  He received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his MBA from Seattle University.

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