Son’s Credit Card Debt Becomes Family’s 7-Year Ordeal

Guaranteeing a credit card for a child about to go off to college is a fairly common occurrence, but it seldom generates as much trouble as it did for Dr. James H. Whitmore, a retired surgeon from Carson.

He has been through a seven-year drama that is not over yet.

When his son, Quentin Whitmore, entered Cal State Dominguez Hills in 1992, he wanted him to have a credit card. This is natural, since even if, as in this case, the child is going to be close to home, the parent knows he will be more on his own and may need emergency financial resources.

And so, after some exploring, Whitmore agreed to co-sign his son’s application with MBNA of Wilmington, Del. “This I did with the stipulation that his credit limit be $500,” he recalls.

At first, all went well. Quentin Whitmore was making small payments on the card out of the allowances his dad gave him.

But then, without ever notifying the guarantor, MBNA, which describes itself as “the largest independent credit card lender in the world with $59.6 billion in loans,” repeatedly raised young Whitmore’s credit limit. It finally reached $9,000.

By the end of 1996, the balance on the card, including late charges, reached $9,089, and MBNA declared the account delinquent. It informed Whitmore Sr. that he owed that amount as guarantor.

The doctor refused to pay. As MBNA put the sum out for collection and subsequently entered a bad credit report against both father and son, Whitmore insisted he had never authorized raising the limits and, therefore, was not responsible for the debts on the card above $500. He did send in $500.

I asked Whitmore whether he wasn’t teed off at his son too.

“I remonstrated with my son and guess what happened?” he said. “His grades went from A’s to nothing. One entire year was wasted.”

Quentin Whitmore, now 24 and still a Dominguez Hills student, explained it this way:

“When I received the credit raises, I assumed [my father] had approved them. I never thought to call him, because at the outset MBNA had agreed not to raise the limits unless he gave his approval.”

A Quicken survey taken last year revealed nearly half of college students bounce checks, 71% of those with cards fail to pay off balances monthly and a majority estimate that they will have $15,000 in debt before graduation. So young Whitmore’s extravagance, or needs, may not be that unusual.

I asked MBNA whether it would acknowledge a mistake in raising young Whitmore’s limit so high.

Raising Whitmore’s limits was indeed a mistake, said Brian Dalphon, a MBNA senior vice president. He said that his credit account was never coded as either a student or a guarantor account, as it should have been.

“When we assign a credit line to a student, it’s at a lower limit, initially $500 [as in Whitmore’s case],” he explained. “And we’re very conservative with it. We don’t raise the limits very quickly. A typical credit line for a student remains at $500 to $1,000.”

When Dr. Whitmore was first billed as the guarantor, however, he was unsuccessful for months in resisting. Finally, the Los Angeles County Consumer Affairs Department agreed to intervene for him.

Timothy Bissell, the agency’s assistant director, observed, “As a matter of contract law, MBNA could not hold him responsible for a higher amount than $500 unless they had notified him they were raising the credit limit.”

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On Oct. 27, 1997, 10 months after trying to bill Dr. Whitmore, MBNA First Vice President Edward Matthews informed the Consumer Affairs Department that the doctor was being absolved of responsibility for repaying the debt above $500 and that a bad reference was being stricken from his credit file.

“I apologize for any inconvenience Dr. Whitmore has been caused by this situation,” he wrote. “Due to a keying error when the account was established in 1992, the account received automatic credit line increases until December 1996 as a result of Quentin Whitmore’s previous satisfactory payment history.”

But, at that time, the nature of the keying error was left obscure. And the “satisfactory payment history” was left undetailed.

According to the Whitmores, the delinquency took the better part of a year to develop, after payment requests under the larger limits far outstripped young Whitmore’s ability to pay.

Quentin Whitmore’s account has now been closed, Dalphon said.

But, Dr. Whitmore said, his son will keep his bad credit rating for several years yet, and six months ago, when the senior Whitmore last checked, he said he found his own credit record still impaired.

MBNA proposed 18 months ago that it would forgive 50% of Quentin Whitmore’s balance, if he agreed to pay monthly installments of $378.

But Dr. Whitmore said his son “has absolutely no income” as he continues his studies.

“So I called them and told them that if they would remove all the late charges, the excess limit charges and reduce this to the absolute minimum that he originally charged, then I would negotiate a settlement with them under these conditions and pay them off myself. But they refused.”

Dalphon declined to say whether MBNA continues to try to collect or has written the debt off completely.

Dr. Whitmore remains unhappy.

“I do not feel that MBNA’s hands are clean in this matter,” he said. “If the limits on this account had not been raised, then my son would not have been able to abuse it. If what the credit card companies are doing to our youth before they can develop a sense of financial responsibility is legal, then new laws are needed.”

But, of course, MBNA denies its policy is to raise limits on students. It maintains that what happened was another of these electronic glitches I sometimes write about.

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Ken Reich can be contacted with your accounts of true consumer adventure at (213) 237-7060, or by e-mail at ken.reich@latimes.com