Credit card fraud but card was never activated, is this even possible?

July 9, 2013 5:53 AM

A few days ago my mom got a bill for a department store credit card, Dress Barn issued by Comenity bank, she opened up 5 years ago. She took advantage of the "get 20% off when opening a credit card with us" offers at the time. When the actual card came, it just sat unactivated in her filing cabinet. The card didn't have a visable expiration date on it.

Fast forward almost exactly 5 years, she hasn't stepped foot or used the online site in that store since. 7/3 she gets a bill for a purchase made on 6/26 - $120. I'm guessing it was printed around that date because another purchase was made again the next day, $150, according to the fraud dept when we canceled the card. Both were done in our local store. Also the fraud rep told us another order, made online was placed on 7/3 before we called in the fraudulent charges.

The card was canceled but my question is how? My only theory was that the new card was stolen from our mailbox. But then how was it activated? I know the activation systems recognize your calling from your home phone number and no further info is needed somethings while activating. Could it be as easy as spoofing are home phone number? It's only the two of us living in this house, so unless she's lying to me, I can't think of another theory.

Again, the old card was never even removed from it's envelope it was sent in. There was no expiration date on the old store credit card, Dress Barn.

This whole situation throws away everything I thought I knew about being safe with credit cards. If it were a card frequently used online and in stores, I can see it being skimmed. But a unactivated card? If I never activate a card, is it customary to send another 5 years later?

Any and all advice will be helpful!

posted by glenno86 to Work & Money (10 answers total)

Even you never activated the card when its expiration date approached, yes, the bank would send you a new one a few months before the old one expired. This has happened to me many times.

I'm not sure how someone was able to use it without activating it though and yes you are usually required to call from your home phone. Possibilities include that the note about only activating from your home phone is a ruse or way to deter attempted theft but really they will allow activation from any number, or the requirement to activate isn't itself real but just something they tell you to get you to call up so they can try to sell you payment protection plans but really you can rip the sticker off the card and go to the store and use it immediately, or maybe they allow in store activation with the showing of an ID but the store clerk didn't take the time to verify the id first or they require activation from home phone but fraudster called in and said she didn't have that number anymore since it's been years and talked them into letting her activate with social engineering skills of hers. Any of that is possible.
posted by TestamentToGrace at 6:03 AM on July 9, 2013

Best answer: Sometimes store cards don't need to be activated. I'm thinking that the Dress Barn card is one of them.

Also, there are instructions for activating cards on-line, but I still think that the card doesn't require activation.

Don't think too hard about this. Somehow someone got your Mom's account and they went to town.

The best way to stay safe with cards is to open the statements and read them.

My Visa number was used to buy some perv in Ohio dick enhancement pills. It went on for months because I wasn't paying attention. I got the card cancelled. I called the dick pill place and got the guys name, address and email account and turned them over to the credit card company. I went to the police station to file a report.

The charges were reversed, but I was in the wrong for not reviewing my bills.
posted by Ruthless Bunny at 6:03 AM on July 9, 2013 [3 favorites]

Best answer: Store cards are very different than bank issued credit cards available for use anywhere. You're activating your account when you open it, and no further "card activation" is necessary. I have a store card through Comenity Bank and was told at the store level that activating my card is a courtesy only, and that I don't even need it for an in-store purchase.
posted by ovenmitt at 6:04 AM on July 9, 2013 [2 favorites]

Best answer: Typically for a department store credit card, you do not need to have the card in hand. You can usually walk up to a register and have them look you up. It used to be that they'd have to call their credit department to have them do the lookup, but these days, with smart registers, ...

So all it really takes is someone who knows how that particular store's system works, and then to be able to convince some minimum-wage employee at the register that you are that person. That person may even be involved in the setup.
posted by jgreco at 6:04 AM on July 9, 2013 [3 favorites]

I had this happen with a Visa issued via Chase. The fact that it was never activated just sort of made it easier for me to deal with the fraud issues, it was pretty obvious I had not used the card. I just assumed the fraud had taken place at where ever the cards were being produced or by someone attacking Chase itself.
posted by JPD at 6:08 AM on July 9, 2013

Best answer: jegreco has got it. I never carry my store cards, just look them up the rare times I need them (generally for an extra bonus off of something).

ovenmitt is right that store cards generally don't require activation; they aren't issued through the big four (Amex VISA, MasterCard, Discover) and can only be used in-store/online.

Assuming there are security tapes, these can be reviewed to help figure out who was doing it. I'm going to assume the clerk was involved at some level; generally you have to provide a significant amount of information and for some stores, the clerk has to call card services to get it. This has been my recent experience at Lane Bryant; at Khols they can just run your drivers license through and input your social security card. When I worked at the security office/cash office of a major department store, we weren't even allowed to call the home office except from a special phone and they had to have the customer there as well for information confirmation.

I'd not go to the lengths yet to put a fraud alert on her ID, but unless you can scrutinize her bills closely for the next few months, do it. Also get her credit report NOW, the free one, not the bullshit payment kind.
posted by tilde at 6:12 AM on July 9, 2013

I've activated credit cards from non-home numbers frequently. It is part of my nomad lifestyle that my address changes all the time and I have to do the address change so the bills don't end up in limbo before I even have a new home phone and then I forget to update the phone. All they use to verify are a few easily learned personal questions and your recent purchases on that card.

Credit card companies are extremely accommodating and really really don't care about the fraud risk because they make money off legitimate use (via their vig) and even more money off customer detected fraud (via their charge-back fees and increasing risk taking sellers vig charges).
posted by srboisvert at 7:11 AM on July 9, 2013

I've always suspected that the 'activation' process is more an opportunity for the card company to sell you credit insurance or something - "while we're processing your activation request, have you thought about how you'd pay your bill if something terrible happened to you?"

It's my guess that if you don't activate for a certain period of time, they just kick in on for you 'as a convenience'. I have no proof of that, but it fits in with the sleazy way credit cards work.
posted by DandyRandy at 8:40 AM on July 9, 2013

A lot of people don't even HAVE a home phone, or it's out of date, etc. It would probably be easy to activate, if it even needed it.

I would suggest it is probably a new card that has been sent out and not received.
posted by Ashlyth at 8:50 AM on July 9, 2013

I've activated cards using the home phone system and they never tried to sell me anything. It usually says "Thank you for calling. Your card has now been activated. Goodbye."
posted by tacodave at 4:41 PM on July 9, 2013