FCRA Series: Trans Union Vs. FTC

This is going to be a complicated post - I am finding out some shocking revelations about our friends in the credit industry. I am like a kid in the candy store. In any case, I wanted to kick off our fun with something that will give you a little flavor of what I am discovering. The credit industry just like any American business is about making money. The conumser however is the one that sometimes suffers. I speak with people everyday in my business that are having a hard time paying their mortgage/rent every month. So it is important to me that you understand why we are tackling this subject.

In 1992 the FTC (Federal Trade Commission) filed an administrative complaint alleging that Trans Union violated Sections 604 and 607(a) of the FCRA by “compil[ing], for sale to clients, lists of consumers, based in whole or in part on information contained in its consumer reporting database . . . . In English this means that the Federal Government felt that Trans Union was violating the law. The Government was not upset that Trans Union was selling our information to third parties (i.e. Credit Card companies). Typical buyers of this information are firms considering extending some kind of credit to the consumers about whom they inquire; they use Trans Union’s information to evaluate whether the consumers are good credit risks. This was all well within the law.

What the Government did see as a clear and alarming issue was the type of information that Trans Union was selling. 

In 1987 Trans Union diversified, launching a “target marketing” division. That division-first TransMark, now Trans Union Lists-uses data from Trans Union’s consumer reporting database, CRONUS, to create mailing lists. The lists are sold to companies wishing to send sweepstakes entries, catalogs, circulars, and other solicitations to classes of customers that they believe will be particularly responsive to their pitches.

So here was the crux of the problem. The “target marketing” gave the buyers of the list a decided advantage since they could specify what type of information they wanted. It was very powerful and profitable for the marketers and for Trans Union.

As part of its argument in the case, Trans Union contended that neither the FCRA nor the FTC Order demonstrated a substantial government interest in protecting consumers’ privacy and, therefore, violated Trans Union’s right to free speech under the First Amendment. “Contrary to the company’s assertions, we have no doubt that this interest – protecting the privacy of consumer credit information- is substantial,” the Court wrote.

Wow! Trans Union basically said that the Fair Credit Reporting Act did not, “demonstrated a substantial government interest in protecting consumers’ privacy”. What more do you say…there is so much more. See you tomorrow.

Be sure and RSS our feed so that you can be updated each time we post.

Here is the RSS: http://feeds.feedburner.com/wordpress/xqWu 

Thanks Matt Sullivan, CEO of Credit Dusters.  ”We are a valuable resource for credit education and financial education!”

http://www.creditdusters.com/

______________________________________________________________________________________

If you have not checked your credit in awhile then you need to. You will receive all three credit bureaus with all three credit scores for the unbelievable price of $14.95. Check it out