April 16, 2001
WASHINGTON (AdAge.com) -- The U.S. Court of Appeals in the District of Columbia today told credit bureau Trans Union Corp. it
The unanimous three-judge decision ruled the sale violates a credit privacy law. The ruling is a major victory for the Federal Trade Commission, which has had a long-running dispute with Trans Union.
Major impact on marketers?
The ruling could have a major impact on direct marketers. The Fair Credit Reporting Act limits the disclosure of personal information gathered by credit bureaus, but there has been some dispute as to whether the limits apply to the sale of information that doesn't include any details of specific transactions, so-called targeted marketing products.
Trans Union, like other credit bureaus, for years used information from credit reports to create various mailing lists -- for instance, lists of people with an auto loans -- that could be sold to direct marketers.
Challenged FTC claim
While rivals dropped the practice when the FTC contended that such information is private under the law, Trans Union said the curbs only applied to information that revealed details of personal transactions. The credit bureau challenged the FTC, arguing that the agency's definition of the mailing lists as consumer credit reports was "arbitrary and capricious" and an attempt to limit its First Amendment rights.
The appellate court in today's ruling said the law bars the sale of any information from the report except for "permissible purposes" such as credit checks, an argument Trans Union had rejected.
The ruling was the second time the Appellate Court has considered the case. A Trans Union spokesman said late today that the company is reviewing the decision.
Copyright April 2001, Crain Communications Inc.