In the early 1990s, Experian and Equifax, two of the nation's three largest credit reporting agencies, stopped selling sensitive credit information it gathers to catalog companies, banks and other purveyors of junk mail.

Now, in a case that began some eight years ago, the Federal Trade Commission has ordered Trans Union, the other member of the big three national credit bureaus, to do the same.

In a unanimous decision, the consumer watchdog agency determined that the Chicago-based credit agency was illegally selling target marketing under the Fair Credit Reporting Act, which protects the privacy of credit information by limiting the circumstances under which information can be disclosed.

For example, the law allows consumer reporting agencies to furnish reports in cases where the consumer has authorized the disclosure or for the extension of credit, employment or insurance.

Trans Union currently handles data on some 160 million people. It receives detailed credit information from numerous local grantors of credit, including banks, mortgage companies, credit unions, auto dealers and others. It then compiles this information into reports and sells them to other creditors nationwide.

But it also compiles the data it has collected into lists of specific categories, and sells the names and address of people on those lists to target marketers, who then solicit the persons listed to purchase goods and services.

The case has been hanging around since 1992, when the FTC first issued an administrative complaint. The charge was upheld by an administrative law judge a year later, and the agency affirm that ruling in 1993. But an appeals court remanded the case to the commission for further findings.

After a full trial, another administrative law judge held that the FTC provided sufficient evidence of the charge. But Trans Union appealed the ruling to the commission.

Now the FTC, in an opinion written by Commissioner Mozelle Thompson, has held that much of the information disclosed by the company in its lists, including the fact that a consumer has a credit relationship with a creditor, "is the type of information used and/or expected to be used in whole or in part for the purpose of serving as a factor in establishing a consumer's eligibility for credit."

The agency also found that although some demographic information the company disclosed did not meet the definition of a consumer report, the age information that also was revealed did bear on the consumer's credit capacity and therefore does constitute a consumer report.

Trans Union said it will appeal the decision.

Published: March 9, 2000

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