Rules List Sold to Marketers Violates Fair Credit Reporting Act

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WASHINGTON ( -- A U.S. appeals court upheld a lower court decision that bars Trans Union Corp. from selling lists derived from personal information in consumer credit reports to marketers.

Unanimous decision
The unanimous ruling by a three-judge panel for the the U.S. Court of Appeals for the District of Columbia sided with the Federal Trade Commission, which contended that such information is private under Fair Credit Reporting Act.

Trand World had argued that while the law clearly bars credit bureaus from selling detailed information about individual transactions, the sale of names and addresses of people who have, for instance, an auto loan or mortage or credit card is legal.

Trans Union, like other credit bureaus, for years used information from credit reports to create these "target marketing product" lists that could be sold to direct marketers. The lists are drawn from credit information but don't have specific details of purchases.

Rivals dropped the practice when the FTC contended that such information is private under the law, but Trans Union argued that the FTC's definition of the mailing lists as consumer credit reports was "arbitrary and capricious" and an attempt to limit its First Amendment rights.

Law not clear
In the latest court ruling, the three-judge panel admitted the law was not entirely clear but said the FTC was within its rights in choosing to interpret the law as it did.

TransUnion spokesman Jeffrey Junkas said that "TransUnion is disappointed" by the decision.

He said: "We believe there are genuine benefits to consumers and businesses from the free flow of information. ... This decision will have no impact on TransUnion's business because we have discontinued the use of credit header data in products and services."

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