Page 1 of 1

Authorized User Non-Liability: sec. 226.12, Reg. Z

Posted: Mon Jan 02, 2006 7:39 am
by David A. Szwak
Reg. Z Official Staff Commentary 226.12(a)(1)-6

6. Persons to whom cards may be issued.

A card issuer may issue a credit card to the person who requests it, and to anyone else for whom that person requests a card and who will be an authorized user on the requester's account. In other words, cards may be sent to consumer A on A's request, and also (on A's request) to consumers B and C, who will be authorized users on A's account. In these circumstances, the following rules apply:

• The additional cards may be imprinted in either A's name or in the names of B and C.

• No liability for unauthorized use (by persons other than B and C), not even the $50, may be imposed on B or C since they are merely users and not "cardholders" as that
{{4-30-99 p.6916}}term is defined in § 226.2 and used in § 226.12(b); of course, liability of up to $50 for unauthorized use of B's and C's cards may be imposed on A.

• Whether B and C may be held liable for their own use, or on the account generally, is a matter of state or other applicable law.