The creditor’s actions in this instance seem incomprehensible and inconsistent. On the one hand, the tradelines were freely granted, while on the other hand they were taken away. To add insult to injury, the OP was then presented with more offers of credit after his accounts were closed. However, these seemingly schizophrenic actions taken by the creditor might all make sense if one considers the creditor to be a collection of separate business units or departments who don’t necessarily share information or communicate effectively rather than as a monolithic entity.
How much departments communicate with each other depends on the creditor’s internal policies, organization, and its IT systems. Such lack of communication and interoperability is quite common in large organizations and can lead to the rather frustrating behavior related in this thread.
Pre-approval letters and invitations may be handled by a marketing department, which is using a list of people who meet a certain criteria supplied by some third party (e.g. one or more of the credit bureaus). The criteria used may not coincide with all of the factors used by other credit-related departments. For cost reasons, this list may not even be supplied by the credit bureau(s) used by the underwriting department.
New credit approvals may be handled by a separate underwriting department, which has its own set of criteria that it uses to evaluate applications. That is why pre-approvals are not guarantees of acceptance.
Adverse actions may be a function of a third department, whose function is to prevent fraud and mitigate risk. In addition to responding to reported fraud events, they may use behavioral models of known fraud patterns to predict when fraud is more likely to occur and take steps to prevent it. In the case of the OP, the large number and amount of tradelines opened within a relatively short time may have triggered a pre-programmed response. The decision to close all of the accounts may have been made by a computer algorithm rather than a human being.
The various departments involved during each phase of the credit life-cycle may not effectively communicate with one another and in some cases may not communicate at all. They may not even use the same set of applications or have access to the same data.
It is quite possible that marketing is still sending out pre-approval applications after the AA because it does not know anything other than that the consumer meets or at some time in the past has met some certain credit criteria. Underwriting may not be particularly concerned with what marketing is doing and may not communicate denial information. The same may hold true for fraud/risk management. It may not have communicated any information about closed accounts to marketing either. Marketing may be completely in the dark and so continues to send pre-approval letters.
It has been previously commented that with some creditors, the “right hand extends credit while the left looks for reasons to take it back” and that they “generally won't tell you when you've gone far enough in seeking credit”, but will “just punish you after you go too far.” This may literally be the case, but not because of any nefarious reasons. It is possible this is simply the result of a bureaucratic structure where each hand really doesn’t know what the other hand is doing.
If that is the case, then it is unrealistic to expect a creditor to inform us when we approach their lending or behavioral limits. Ideally that should be the case, but in reality the account approvers may not know when we approach those limits and those that enforce the limits may only tell us when we have exceeded them and triggered an undesirable response.
