Over the years when we receive claims, I’m always delighted to see a signed credit application attached and completely filled out. As we know full well, the credit application is the initial contractual document by which the terms and conditions are established. It doesn’t mean that they won’t change over time but it’s the framework upon which a sales and credit relationship is established. 

However, one of the fine points of any legal document has to do with the accuracy of the information being provided. Although there’s a tendency to focus on the financial information and the bank and trade references, I often see nicknames for the president, sales manager, purchasing manager, and other executives noted on the application. I don’t mind seeing the nickname as long as the correct proper first name is also included. Unfortunately however, what we often come across are only the nicknames such as the following:

Male – Buck, Budd, Butch, Buzz, Duke, Skip, and Sly (yes, that was a nickname provided)

Female – Charlie, Cookie, Cricket, Dusty, Gigi, Izzie, Kiki, and Kitty 

When you couple any of these nicknames with a very common last name such as Jones, Smith, Wilson, Anderson, Brown, etc., you have a name that might not have much collection and/or legal value. 

Now, it’s not to say these nicknames couldn’t actually be a birth name or legally changed name. But sometimes the nickname doesn’t support the party being located and/or it convolutes the responsibility for the obligation. 

For example, we found “Kiki” was short for Kristina, president of the company, but it could have also been short for Katherine. Surprisingly, “Buck” turned out to be a nickname for Theodore! who was the materials manager. In other words, the nickname and the true name could be miles apart. 

We’ve also seen nicknames used as the formal signature on an application. Again, if the nickname is the actual legal name, all is good. But if the nickname is a not a valid legal name of the representative individual signing off on the credit application, then the legal viability of that application could be called into question. I think you can appreciate how a personal guarantee on the credit application could be null and void with a nickname on the signature line.

In order to minimize this oversight there are a couple of simple precautions you can take. 

  • Confirm the name if you see what appears to be a nickname.
  • Request a copy of the individual’s driver’s license or another government-issued photo ID.
  • If even the full legal name includes the nickname, ask for the current personal address, if it’s not on an official photo ID. 

These same tips would apply to any individual who goes by their initials as well. Sometimes we see names like T. Jay Brown, where T stands for Thomas but the individual goes by the middle name Jay. Having the signee print their full name will make the application complete.


Hope this contributes to keeping your credit application legally tight and effective. 

Your thoughts and comments (nseiverd@cmiweb.com) are most welcome!

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