Citi issues 3.5 million unsolicited credit cards

September 28 2007: 4:18 PM EDT

NEW YORK (CNN) -- Citi is issuing approximately 3.5 million credit cards to department store customers who did not request them, the banking company confirmed Friday.

Macy's selected a portion of its card members who have had inactive accounts for more than two years to receive the new Citi MasterCards, according to Citi spokesman Samuel Wang.

A federal Law dictates that banks can issue credit cards only when customers request them or they replace existing cards. Citi considers the cards replacements to the Macy's cards already accepted by the customers.

According to news reports, consumer groups had raised concerns about the move, saying it could put customers' personal information at risk either in the account-creation process or because the customers, not knowing they were being sent a new card, would not know if it had been stolen in transit.

Citi said customers' personal information was not compromised during the issuance process because Citi is the issuer of both the Macy's card and Citi MasterCard.

Also, the credit cards come with an activation sticker requiring the customer to call Citi to activate the card before it can be used, it said.

Although customers will still continue to receive special offers from Macy's, the credit cards do not bear the Macy's name and can be used anywhere MasterCard is accepted.