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Inactive Macy's account switched to MasterCard by Citi causes confusion
Published on Sunday, Nov 11, 2007
Paula Buie usually ignores most of her junk mail.
''I do usually open stuff, but if it says anything about a credit card, I just throw it away,'' said the Akron woman.
But when Buie received what she thought was an unsolicited credit card in the mail with a $9,000 credit limit, she called me.
The card from Citi, which Buie said she didn't apply for, had a sticker affixed to it with a normal toll-free number to activate it. But the paperwork also had a separate toll-free number for her to call if she didn't want the card. When she tried to call that number, she got an automated phone system that wanted her Social Security number.
Buie wasn't about to divulge her Social Security number for a credit card she didn't want — and wasn't sure it was legitimate.
She wondered whether credit card companies had gone beyond their practice of sending out unsolicited offers for credit cards telling you that you're pre-approved for a card, but not actually sending it. There was no information about the origins of Buie's card, just the packet with the card and a pamphlet outlining the credit card agreement.
After making several calls, I found out that Buie didn't apply for the card, but it wasn't an unsolicited card. Well, sort of. The card Buie received from Citi in October was actually a converted account from an inactive Macy's account. This also included predecessors to Macy's, such as Kauffman's here locally.
A Citigroup spokesman confirmed that Buie was among those accounts, which were also serviced by Citi.
According to a statement from Citi, the issuer ''identified a select number of its existing but inactive Macy's credit card customers to receive a special MasterCard, which can be used at more locations and has more financing options. The selected customers were notified in advance that their Citi-issued Macy's credit cards would be replaced and given an opportunity to retain their existing cards.''
Buie said she doesn't recall receiving any letter — which a Citi spokesman told me would have been sent in July — though she also could have mistaken it for junk mail.
There are a few strange
things about this offer — I don't have the best memory to start with, but I think getting a letter in July and then actual credit cards in the mail three months later without any explanation to remind me these are the former Macy's cards would be confusing.
And if someone has an inactive credit card, it's doubtful that they will want yet another card to use, though the Citi folks' theory is if it's a MasterCard, it could be used in more places.
Buie said she never used her first card, and the only reason she keeps the account open is to get an occasional mailer about extra sales and ward off inquiries at the checkout asking if she wants to open a department-store card.
In its statement, Citi apologized for the confusion.
''We regret that our communications with customers about this program did not explain clearly enough that both their Macy's card and the new card were Citi-issued and that they had the option to decline the substituted card. We apologize to any customers who may have missed the initial notice or were confused by our correspondence and we are already working on improving such notices. Any customer who receives the new card and would like to cancel it may call 800-432-0282.''
The Citi spokesman also told me that the company has changed its procedure for customers who want to cancel the card they receive ''in response to customer concern.'' They no longer have to give their full Social Security number and only have to give the last four digits. ''If they wish to conduct any other business with Citi, however, they will be required to provide additional information.''
When I inquired whether the reissued cards resulted in credit checks that were not requested by the consumer, which might affect a credit score, the Citi spokesman told me that because the cards were sent to existing customers, only an ''account review inquiry'' was conducted. The inquiry is a customary practice for creditors to conduct periodic reviews of a cardholder's credit and those inquiries are only visible to the customer and not other creditors. Inquiries also do not impact the credit score, since it's not new credit, he said.
Rod Griffin, spokesman for Experian, one of the three credit bureaus, also confirmed that inquiries do not impact a credit score. Griffin said pre-approved credit card offers that come in the mail are usually a result of a lender asking a credit bureau to send it a list of consumers whose creditworthiness matches certain criteria for its cards. Those inquiries, as well as credit inquiries from insurance companies, potential employers and consumers accessing their own credit report, are only visible to the consumer and not other lenders and do not count against the credit score.
''None of those things represent new debt,'' Griffin said. ''Inquiries that are a result of your application for credit or when you initiate a credit transaction, those inquiries would be shown to other lenders.''
I had originally called Griffin before I knew the cards Buie had received were converted Macy's cards. Griffin said most credit card issuers have migrated away from the practice of sending actual cards and instead send the pre-approved letters.
''They came to understand that sending a card in the mail as part of a pre-approved offer wasn't generally a good idea,'' he said.
If you are not interested in the pre-approved credit card offers, you can always opt out of receiving them. You can either call 888-5-OPTOUT or 888-567-8688 or go online to www.optoutprescreen.com. This is a free service of the three credit reporting agencies and you will have to give your Social Security number so they can opt you out of the offers.
There are two options — you can either opt out of the offers for a period of five years, or permanently. If you want to opt-out permanently, you must mail in a form. Griffin said there is no method to check the status of your opt-out request, so if you don't know if it has been five years, or if you permanently opted out before, you might have to wait until you begin getting the offers again.
I went online to put in a new request to permanently opt-out of the offers, just to be safe.
A side note: When you get the pre-approved offers in the mail, don't just toss them in the trash. At least shred the part with the application, so an identity thief can't grab it out of your trash and open up credit in your name.
Betty Lin-Fisher can be reached at
330-996-3724 or blinfisher@
thebeaconjournal.com.
Get the full article here.
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