Trans Union Loses FTC Suit on Use of Personal Data
Trans Union cannot sell lists to marketers derived from personal data from consumer credit reports, a federal appeals court has ruled.
A three-judge panel of the U.S. Appeals Court for the District of Columbia District Court, which upheld a lower court’s decision, supported the Federal Trade Commission’s contention that such information is private under the Fair Credit Reporting Act.
The decision resulted from a 2000 Trans Union lawsuit against the FTC and other federal agencies seeking to stop implementation of Gramm-Leach-Bliley Act regulations, according to the FTC. The Act mandated that financial institutions give customers the opportunity to opt out from having their personally identifiable financial information sold to other marketers.
Trans Union charged in its suit that though the regulations don’t allow credit reporting agencies from selling detailed data about individual transactions. But information such as name, address, telephone and social security numbers is not “financial” information and should not be regulated.
Trans Union, along with other credit reporting agencies, used such information to build lists to sell to direct marketers.
The court rejected this argument and said the FTC was right to interpret the law as it did.
The court also rejected Trans Union’s claim that the regulations violate its right of free speech. According to an FTC statement, Trans Union’s dissemination of consumer information “warrants reduced constitutional protection.” The privacy regulations were narrowly tailored to directly advance “the substantial governmental interest in protecting consumer privacy,” the statement continued.
In other news, a federal jury ordered Trans Union to pay a woman $5.3 million for confusing her credit history with that of another woman’s.
A U.S. Court District Court jury in Portland found that Trans Union willfully violated the law when it repeatedly misreported Judy C. Thomas’ credit history, according to the Associated Press.
