So Macys is outfitting its stores this Christmas with desks and mailboxes for kids to write letters to Santa, all in the hope of getting more folks into the store and spending money they don’t have.

Well, here’s my request for Santa for Christmas: Please get Macy’s to fix my credit score, dinged when they decided to sell dormant store accounts to CitiBank.

I was a loyal Hecht’s customer. I had a Hecht’s card. When Macy’s bought Hecht’s, I had no interest in shopping there as I did not care for their taste in women’s clothes, their prices, or the way they
organized their stores.

In September of 2007, Macy’s converted my Hecht’s/Macy’s store card into a Visa credit card account, without my knowledge or consent. I was one of an estimated 3.5 million consumers to have the same “benefit” shoved down their throat.

I only discovered it when I paid to get my credit scores and saw a note that my score was affected by how recently I’d opened a revolving account. I methodically went through all the credit cards listed on my account and couldn’t account for one, opened Sep 07. A little digging and a phone call and I discover CitiBank opened a credit card account “for” me!

Now I have an excellent credit score, but I surely don’t appreciate a “ding” for something I did not do. I limit my credit cards, and I did not want a new one. And lord knows, with all the debt Americans are already saddled with, we do not need a company giving out more unwanted credit.

I then did what any good consumer would do, contacted the consumer reporter for a local TV station. The first thing Macy’s corporate did was to tell the producer of the segment that “this could not have happened,” basically either a bald-faced lie or the words of a communications director kept out of the loop by the executive office, since by then, May 2008, the story of this really bad idea was already all over the consumer-oriented web. See here and here.

The segment was shot, and weeks went by before it aired. In the meantime, Macy’s changed its story to the consumer reporter, instead acknowledging the truth that it had sold the accounts to CitiBank, that CitiBank gave people the chance to opt-out, and it was Citibank’s fault, blah blah blah.

Well, guess what? Thousands of folks never got opt-out notices; CitiBank did not verify that the addresses on file for Hecht’s customers were still valid; and the opt-out notices had no markings to connect them to Macy’s, so many if not most recipients, like me, would have just discarded them as junk mail. Even if they had had Macy’s markings, if you were not a Macy’s shopper, would you have opened what looked like junk mail?

The multiple poor decisions on Macy’s and CitiBank’s parts are astonishing: privacy, identity theft, affecting people’s credit scores, and just plain pissing people off. So, how about it Macy’s Santa? Can you get that credit card account removed from my credit history so it never existed? Can I get my old credit score back?

Let me offer this excerpt from The Consumerist:

Got An Inactive Macy’s Store Account? Here’s Your New Citibank Mastercard

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 “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.

We were concerned, too. It didn’t seem possible for a store to simply decide to open an unrelated credit card account for customers who had inactive store cards. How was it happening?

…
Credit Score Implications
…Our best guess is that if you’re an inactive Macy’s card customer and you don’t opt-out in time, Citibank will have to ping your credit to determine the appropriate rate and limit to give you, which would look like an application for new credit and would drop your score temporarily.

At that point, if Citibank decided to give you a different limit than your Macy’s account had, your available/utilized credit ratio would change, which would affect your score either positively or negatively, depending on the individual. It’s our understanding that store cards are weighted equally to credit cards by FICO for this part of the score.

Canceling the inactive Macy’s account and replacing it with a new Citibank account would shorten credit history for some consumers, a change which would lower some scores.

The effect this new credit card will have on a credit score depends entirely on the individual. For some, it may help. Others will see a drop in their score that they did not know was coming. For those consumers who are mortgage or car loan shopping, the new card could pose trouble.

Privacy

We don’t know exactly what steps Macy’s has taken to ensure that it did not mail “opt-out” forms (and, eventually, credit cards) to old or outdated addresses. In addition, receiving an (apparently) unsolicited credit card in the mail is a “symptom” of ID theft and will likely alarm many consumers who disregarded Macy’s original “opt-out” letter as “junk mail.”

We expressed these concerns to Professor Warren, wondering if we might be making a mountain out of a mole hill. Turns out, she’s worried too…

Consumerist … asked if the Citibank Mastercards offered any Macy’s benefits or were branded by Macy’s. Macy’s said the cards were standard Citibank Mastercards with no ties to Macy’s. They also confirmed that after 25 months in inactivity, Macy’s store cards would be “flipped.”

In addition, “flipped” customers can’t cancel by calling Macy’s. All cancellations must go through Citibank.

We have to wonder how Macy’s and Citibank can justify sending “opt-out” notices for something as sensitive as a new credit card account. As Professor Warren said, “I think the appropriate move here is to send a letter saying, ‘We’re closing all inactive Macy accounts. If you would like a Citicard instead, check the box.’ Why don’t they do that?”

Good question.