I had a Platinum Visa credit card for many years with First Chicago. In July 1999 I received a notice with my bill that in August my First Chicago credit card will become a First USA credit card. I had dealt with First USA before with a different account back in 1997 that I closed out. They were crediting my payments late, about 15 days after I mailed them.
In view of this, I didn't want another First USA account, so I called the number on the statement and closed the account. I received a letter from the bank dated 7-30-1999 confirming that my account was closed. I had paid the account in full and it reflected a zero balance at the time of closure.
Then on 9-03-1999. I received a bill from First USA in the amount of $59.95. I looked at this statement which also had a different account number on it from my last First Chicago statement. It showed a charge dated 8-20-1999 from BDM/Field and Stream Club in the amount of $59.95. I had never heard of this company and had never authorized a charge from them. I called First USA and told them this, and reminded them that the account was closed. They would do nothing for me and told me I had to call the merchant. I called the 888 number for the merchant that was listed on the statement. I demanded credit immediately. They told me that there was no record of me in their system and hung up. I then wrote a letter to First USA to the billing dispute address in which I explained all of this, and demanded that this charge be removed and my account to remain closed as directed. I sent it via certified mail. About 1 week later I received the delivery receipt back from the post office. Then I received a form letter from First USA indicating that they were forwarding my complaint to the merchant.
At this point I filed a written complaint against First USA with the Better Business Bureau of Chicago, which services the area of Illinois where the First USA statement was mailed from.
I received a telephone call on 9-29-1999 from First USA's Executive Offices. They told me that they had received the complaint from the Better Business Bureau, and had contacted the merchant on my behalf. They said that after a more detailed search that they had found me in a main database and were issuing me credit for the charge. I accused BDM/Field and Stream Club of being a scumbag boiler room operation that somehow had stolen my account number. I then learned that they are a subsidiary of First USA and have First USA's customer account numbers in encrypted code so their telemarketers can automatically charge someone's account. First USA maintained that BDM/Field and Stream Club is a reputable firm and that I authorized this charge through a telephone call made to my home. I most certainly did not. I screen all of my calls through an answering machine to avoid telemarketers, and have never bought anything from a telemarketer.
I then asked how something could be charged to a closed account. I was told that they have a "soft closure" and a "hard closure". My account had a soft closure meaning that a charge posted would automatically reopen the account. A hard closure means that the account cannot be reopened. They said they changed my account closure to a hard closure.
In the 24 years I have had credit cards, I have never heard of these account closure terms. They are not mentioned in the last credit card agreement that I received from these people either.
Now I am assuming that my problem has been resolved after considerable time and frustration. Now my concern is that there may be others with First USA accounts who were charged with this fraud and maybe didn't notice this on their bill. I pay all of my credit accounts in full upon receipt of the statement and match all my monthly receipts to the statement. Fraud like this stands out for me. For people who just make monthly payments and don't pay close attention to their statement, this type of fraud may go undetected.
First USA has been in the news a lot lately due to customer service issues and bad customer relations. There is a major negative article about them in the new November 1999 Kiplinger's Personal Finance Magazine. I suggest that anyone who has a First USA account should pick up a copy of Kiplinger's or read it at your library. Better yet, pay off your First USA account and close it. Tell them that you want a "hard closure". There are many other card issuers out there that give superior customer service to their cardholders.