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#556268 - 05/22/06 06:21 PM Credit cards for commercial clients
Maria Offline
Platinum Poster
Joined: Apr 2001
Posts: 502
Sylacauga, Al, United States
We are implementing a new credit card program for commercial clients.

On the application we provide a place for the authorizied signors of the company to identify who should receive the credit cards. Example: Jody is an authorized signor for The Greek Restrauant account. Susie is not an authorized signor for the account but Jody provides the approval for the bank to give Susie a credit card.

My thought (question) is how far does the bank need to go to verify Susie (signature, ID, etc) or does the bank even need to verify Susie since the bank verified The Greek Restrauant for CIP and the bank verified that Jody is permitted to sign on behalf of The Greek Restrauant by corporate resolution. Would The Greek Restrauant be picking up the liability for Susie?

Thanks for your thoughts.

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#556269 - 05/22/06 06:25 PM Re: Credit cards for commercial clients
Sound Tactic Offline
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Sound Tactic
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Posts: 5,349
For CIP purposes the bank needs to CIP The Greek Resteraunt.
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#556270 - 05/22/06 06:51 PM Re: Credit cards for commercial clients
Maria Offline
Platinum Poster
Joined: Apr 2001
Posts: 502
Sylacauga, Al, United States
Nation:

I understand the CIP requirements for The Greek Restaurant and I also understand the requirements to verify Susie as an authorized signer through the corporate resolution.

My concern is Jody. Is there anything we should consider since Jody will be receiving a credit card? Not necessarily just CIP but potential risks associated with this account.

thanks

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#556271 - 05/22/06 07:04 PM Re: Credit cards for commercial clients
Creditcopper Offline
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Joined: Sep 2004
Posts: 203
Michigan
Maria,
we have a similar program here, accommodation visa cards for commercial customers. First off, the application is a business application so Jody would not have this card reported on her personal credit because she did not sign for it, Susie the personal on the corp. resolution as authorized signer requested a card for her. Secondly, the card is issued in the business' name and then the individual person AND the terms & conditions state the card will be used for business purposes only and not for personal use. Lastly, if the card is past due, we collect against the business not the individual. It's up to the business to get the money from the person if they failed to meet the terms & conditions.

We CIP the authorizer signer (most times, its the owner or executive from the business and we know them well) and the business but not the employee
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#556272 - 05/22/06 07:25 PM Re: Credit cards for commercial clients
Maria Offline
Platinum Poster
Joined: Apr 2001
Posts: 502
Sylacauga, Al, United States
Quote:

the card is issued in the business' name and then the individual person AND the terms & conditions state the card will be used for business purposes only and not for personal use




I think the terms & conditions is what I am concerned about.

Does your terms & conditions identify that the commercial client will be responsible for identifying who is to receive a card, verify the identity of the person receiving the card, & be responsible for payment even if misuse of card?

Thanks again

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#556273 - 05/22/06 08:51 PM Re: Credit cards for commercial clients
Creditcopper Offline
100 Club
Creditcopper
Joined: Sep 2004
Posts: 203
Michigan
Quote:

Quote:

the card is issued in the business' name and then the individual person AND the terms & conditions state the card will be used for business purposes only and not for personal use




I think the terms & conditions is what I am concerned about.

Does your terms & conditions identify that the commercial client will be responsible for identifying who is to receive a card, verify the identity of the person receiving the card, & be responsible for payment even if misuse of card?

Thanks again




The T & C has the authorization for collection against the "Holder" in case of default or misuse. It is directly from VISA and doesn't address the client responsibility for who gets what, etc. Our application addresses that (very simply, not alot of meat to the application but it gets the job done). We have had little trouble with these accounts primarily because they are really just to accomodate the businesses and not heavily marketed. the loss we have taken was on a fraud situation well after the cards were approved.
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