Unsolicited credit cards: What to do with them and who is “offering” them

Do you always open all your mail?   Or do you get busy and assume that it’s junk mail or just another credit card offer?  Today I saw a news cast on one very good reason why you should always open your mail and read the fine print.

10TV.com reported on a Columbus, Ohio man who recently opened his mail to find, not just a credit card offer, but a credit card.  A credit card that he never asked for or completed an application for.   But here it is.

Reading through the letter that accompanied his brand new Discover Card he finds out that his particular membership at Sam’s Club includes a Discover Card, unless you “opt -out” either when registering your Sam’s Club membership or when sent a letter which let’s you know you were approved and your credit card is on its way.

Sam’s Club is not the only store that offers this type of “service.”  Macy’s customers found that they had become the not so proud owners of Citibank MasterCards.   Apparently, 3.5 million Macy’s customers were issued the Citibank MasterCard that they could use anywhere, since they were already users (in same cases even inactive users0 of the Macy’s store credit card.  JC Penny, Sears, and Target have also performed a similar service.

Isn’t receiving an unsolicited credit card against the many credit card laws that are meant to protect consumers?  Apparently not, it is one loophole that some stores and credit card companies can use to further promote their credit card services.  The Truth In Lending Act specifically states that “no credit card shall be issued except in response to a request or application therefor. But there is a loophole that stores and credit card companies are taking advantage of.  If you already have a credit card with a store they can actually send you a new or replacement.

What do the experts have to say?

“It’s of questionable legality,” says Chi Chi Wu, staff attorney at the National Consumer Law Center. At the least, “it certainly violates the spirit of why the prohibition against unsolicited cards was enacted.”

“In my view, it’s a privacy violation and a customer violation,” says Mari Frank, author of Safeguard Your Identity. “Privacy builds trust. Lack of privacy destroys trust.”

There are some dangers associated with unsolicited credit cards.  What if you don’t open your mail, but simply “toss” it in the trash.  Now some lucky dumpster diver is the proud shopper at any store that they like using this credit card.  They now have access to your private information.  For others it is simply a matter of financial security, the credit card can give them the opportunity to spend money that maybe they really should not be spending.

Most of the credit card companies claim that receiving, returning or opting out of unsolicited credit cards does not affect your credit.  (Even though they are apparently running a credit check before they issue one to you).

However, you can avoid unsolicited credit cards.

  • Read the fine print on both your store credit card applications and billing statements carefully. Be sure to opt out of any offers you do not want.
  • Open all your mail.  If it is a credit card offer you recognize respond.  If not, be sure to shred and dispose of properly.
The FTC (Federal Trade Commission) offers this advice to prevent unsolicited offers:

To opt out for five years: Call toll-free 1-888-5-OPT-OUT (1-888-567-8688) or visit www.optoutprescreen.com. The phone number and website are operated by the major consumer reporting companies.

To opt out permanently: You may begin the permanent Opt-Out process online at www.optoutprescreen.com. To complete your request, you must return the signed Permanent Opt-Out Election form, which will be provided after you initiate your online request.

When you call or visit the website, you’ll be asked to provide certain personal information, including your home telephone number, name, Social Security number, and date of birth. The information you provide is confidential and will be used only to process your request to opt out.

If you don’t have access to the Internet, you may send a written request to permanently opt out to each of the major consumer reporting companies. Make sure your request includes your home telephone number, name, Social Security number, and date of birth.

Opt Out
P.O. Box 919
Allen, TX 75013

Name Removal Option
P.O. Box 505
Woodlyn, PA 19094

Equifax, Inc.
P.O. Box 740123
Atlanta, GA 30374

Innovis Consumer Assistance
P.O. Box 495
Pittsburgh, PA 15230

You can also contact the  Do Not Call Registry and DMA (Direct Mailing Association)  to prevent unsolicited offers.

If you have a complaint you can stop them when you file a complaint. Visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261 for more information or watch the video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
What do you think?  Should companies be permitted to simply send it to you?
Personally, if I wanted a credit card I would do what I do for all my other purchases, do my research and go after the one I want.