The Consumerist Rips Macy's...
August 20, 2007 02:53 PM
...after someone (an anonymous employee, presumably) leaks an internal Macy's document to the consumer protection website:
Recently, a Consumerist tipster sent in an internal memo from Macy's explaining that the store was "flipping" 3.5 million inactive store accounts into Citibank Mastercards. The memo reads:"Approximately 3.5 million inactive (24-48 months) Macy's accounts have been selected to "flip" to the Citibank Mastercard. That means the customer will be sent a Citibank Mastercard to replace their inactive Macy's card. "
The "flip," as they call it, was "opt-out"—which means that if you missed a recent letter from Macy's explaining that they were going to open a credit card for you, you can expect a Citibank Mastercard in the mail.
We hadn't heard of this questionable-sounding practice before, so we showed the memo to Elizabeth Warren, consumer law expert and Harvard professor. She hadn't heard of it either, but expressed concerns about what this action by Macy's might do to a customer's credit score.
As far as we can tell, Macy's is taking advantage of an "information sharing" clause in their original store card agreement. The clause states that Macy's is allowed to share information with Citibank as an "affiliate" of Macy's. Opting-out of the information sharing agreement requires calling or writing Macy's. We suspect few card holders bothered.
Nowhere in the clause does it say that the term "information sharing" means that Citibank has the right to open new credit card accounts for inactive Macy's store card holders. So why are they doing it?
Good question. I had an inactive Macy's card for years, but it was reactivated last year when our wedding registry was at Macy's (that was a customer service nightmare in and off itself). If you've had a Macy's account in the past--and I'm guessing lots of Cincinnatians have--you may want to look into this Citibank MasterCard matter. There could be a credit card out there with your name on it that you don't know anything about.
HT: Amy Alkon