In the past, credit card companies have targeted minors to apply for credit cards, with special emphasis on college students. Starting in 2009, new laws were passed to protect minors from credit card companies.
Significance
Minors who are not emancipated cannot enter into a legally binding contract. When a person signs up for a credit card he is entering into a legal contract, therefore a minor cannot be held liable for credit card debt in most cases.
Fraud
For a minor to be held liable for credit card charges, the credit card company must show that the account was obtained fraudulently. Examples of this would be a minor applying for a credit card account using a fake name, birth date or Social Security number.
New Laws
President Obama signed into law the new Credit Card Act of 2009 on May 22, 2009, and the final part of this new law took effect in 2010. The Credit Card website states "credit card companies are banned from issuing accounts to anyone under the age of 21 unless they have an adult co-signer, or can prove that they have enough income to re-pay the debt." The new law also mandates that credit card companies issuing free gifts for college students must be located at least 1,000 feet from any college.
0 comments:
Post a Comment