Fergie's Tech Blog

'Flipping' Store Cards Into 'True' Credit Cards A Common Practice?

Martin H. Bosworth writes on ConsumerAffairs.com:

"Flipping" store cards into true credit cards, without the cardholder's consent or sometimes even without their knowledge, is indeed a common practice in the industry, especially by Citibank.

Macy's store card owners had a similar experience to Finch's in October 2007, when many of their cards were converted into Citibank MasterCards, often with different interest rates and terms. Not only does the conversion potentially harm the cardholder's credit rating, it also creates a brand-new account that identity thieves can use to buy merchandise or open other new accounts.

In March 2006, a few months before the August fraud incident that was similar [...], Citibank shut down thousands of its ATM and debit cards in several countries as a result of a breach of the network used to process payment transactions on behalf of Visa, who co-owned the Citibank debit cards.

posted by Fergie @ 3/18/2008 02:15:00 PM