Policies Put Consumers in Credit Card Catch-22 : Identification: Customers find themselves on merchants’ marketing lists after complying with demands to produce more than a driver’s license.

Once upon a time, credit cards were simply for buying things on credit. But that was in those dim, dark days when a driver’s license was for driving and a Social Security number was for old-age benefits.

Today those three items are evolving into a kind of unofficial but very real universal identification system. And while it is often against the rules--or even downright illegal--to use them this way, those who resist find the full weight of the nation’s commercial establishment brought against them.

Try to charge an item on a credit card without a driver’s license, try to pay by check without a credit card, try to reserve theater tickets or even make reservations in some restaurants, and you’ll find immediately what the requirements are.

The reasons for the growth of this system are plain enough. Merchants, theater and restaurant owners and other vendors are increasingly plagued by bad checks, no-show reservations and other forms of theft and cheating. They want to try to protect themselves whenever possible.

But one increasingly common practice--that of using credit cards as a backstop for bad checks--is coming under attack.

According to Bankcard Holders of America, a consumer group based in Herndon, Va., when a merchant writes your name, driver’s license number (which in many states is your Social Security number) and major credit card number all over your check, he is exposing you to fraud at least as much as he is protecting himself from it.

Checks travel a lengthy route from the merchant to his bank to yours. Anywhere along that line, “anyone who has access to the check, or even gets a quick look at it, has all the information he needs” to buy merchandise over the phone and charge it to you,” said Elgie Holstein, director of Bankcard Holders. “Or a thief might apply for a credit card in your name.”

“Application fraud” is one of the fastest-growing new scams, he said.

Indeed, that and related frauds and dubious practices have become common enough to persuade the Iowa legislature to prohibit merchants from recording such data on checks.

Holstein said he has also heard of merchants using this information, or telephone numbers recorded on credit-card slips, to build marketing lists for mail or phone solicitations.

Officials of Visa U.S.A. told Bankcard Holders that “we do not believe the information is used by the merchant for marketing purposes,” but MasterCard International said: “It is indeed our understanding that many merchants who ask for a cardholder’s personal information do so for marketing purposes.”

Because 20% to 40% of people Bankcard Holders surveyed have unlisted telephone numbers, often to avoid just this sort of call, this practice exposes them to invasion of privacy, Holstein said.

Finally, many merchants use a credit card as a fallback for a check that bounces. Stores of The Limited chain even stamp the check with an authorization, which they have the customer sign, so that the amount of the check plus a $15 fee can be charged to the customer’s credit card if the check is returned.

Visa and MasterCard say this is not permitted.

“If the personal check is returned, the merchant is not permitted under Visa regulations to submit a sales draft to cover the returned check,” Robert H. Miller of Visa wrote to Bankcard Holders.

“Even if the customer has provided his permission to do so, this is considered a refinancing of an existing obligation and is strictly prohibited under Visa regulations.”

Darold D. Hoops of MasterCard wrote, “A merchant may not submit a credit-card slip for the amount of a returned check.”

But because merchants do it, “it is possible to conclude that Visa and MasterCard have to some extent looked the other way,” Holstein said.

A Visa spokesman said last week, “It is our position that a merchant cannot refuse to accept a Visa card if the consumer refuses to provide a phone number.”

He added that Visa is “studying new rules” on the subject. And a MasterCard spokeswoman said the company may not know about merchants’ use of credit cards to cover bounced checks unless the consumer complains.

Holstein acknowledged that merchants have the right to ask a customer who wants to pay by check to show a credit card as identification. It is when the merchant starts recording the credit-card number that it becomes objectionable, he said.