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Trans Union was ordered this week by the Federal Trade Commission to stop selling sensitive consumer data on 160 million Americans to junk mail producers. The FTC charged that Trans Union violated the Fair Credit Reporting Act. The FTC says selling consumer information to target marketers who lack one of the "permissible purposes" enumerated under the Act is illegal. In reaching its decision that Trans Union's sale of target marketing lists violated the FCRA, the Commission applied a two-pronged analysis. It determined Trans Union's target marketing lists qualify as consumer reports if they communicate information that (1) bears on a consumer's 'credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living and (2); is 'used or expected to be used or collected in whole or in part' to serve as a factor in determining credit eligibility. Because the Court of Appeals had already determined that "tradeline" information contained in Trans Union's lists met the first prong of the definition, the Commission focused on the second prong and "reviewed record evidence detailing the various factors lenders use in evaluating and scoring credit eligibility.
Trans Union responded to the FTC action by stating it will appeal a ruling that orders it to stop selling certain target marketing lists and demographic models available from its target marketing business. Trans Union says the lists and models offered by its PerformanceData service do not reveal confidential credit information about consumers. They consist only of names, addresses, and types of credit held by consumers, and do not disclose any details about consumers' credit status and payment history. In addition, Trans Union says consumers are given the choice to have their names removed from all lists provided for target marketing.
For more information visit www.ftc.gov or www.transunion.com.
