The Federal Trade Commission ordered Trans Union Corp. to stop selling its CRONUS-based target marketing lists. The FTC declared the lists to be credit reports and therefore in violation of the Fair Credit Reporting Act (FCRA).
Trans Union plans to appeal the decision.
The Chicago-based firm’s CRONUS-derived master file, contains data on 160 million individuals and about 110 million households. It is one of the databases Trans Union uses for target marketing purposes. It is updated each week with information received daily from credit grantors, banks, mortgage companies, credit unions, auto dealers, collection agencies and other records–both public and private.
“Lists and models offered by PerformanceData [the division that handles the CRONUS-derived marketing files] do not reveal confidential credit information about consumers,” said a Trans Union statement. “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.”
The FTC, in a unanimous 55-page decision written by Commissioner Mozell Thompson affirming the rulings of two administrative judges–one in 1993 and another in 1998–said that Trans Union’s marketing lists violated the FCRA because they contained more information about a person than is allowed.
According to the FTC, disclosing such personal identifiers as name, address, ZIP code, telephone and Social Security numbers and mother’s maiden name are permissible under the Act.
But, it said, including information that has to do with a consumer’s credit worthiness, credit standing, character, general reputation, personal characteristics and mode of living that were used or expected to be used in determining an individual’s credit eligibility was not permissible.
The FTC also brushed aside Trans Union’s First Amendment challenge to the administrative law judge’s decision. Targeting marketing lists “do[es] not confer the types of lofty or important issues or themes traditionally recognized as central” by the constitution’s free speech amendment, the decision said.
According to the FTC, Trans Union’s marketing lists “concern private information about an individual consumer’s credit history and other confidential data” and as such were not protected under the First Amendment.
Stating that the lists “do not possess all the elements typically associated with commercial speech,” the FTC held that “the lists have sufficient commercial speech qualities to warrant intermediate First Amendment protection.”
The FTC began administrative proceedings against Trans Union in 1992 after alleging the information provided to marketers in its CRONUS-based reports exceeded permissible limits under the FCRA.
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