TransUnion Aims To Settle Case of Consumer Data

TransUnion Corp. has agreed to offer as much as nine months of free credit-report monitoring to more than 150 million Americans under a legal settlement. Consumer advocates' reaction was lukewarm, saying the services involved are only somewhat useful.

The case, filed in federal court in Chicago, claimed that the credit bureau had violated the Fair Credit Reporting Act when it sold consumer information to businesses for their targeted marketing efforts.

Under the settlement, affecting a wide swatch of Americans, any consumer who had a credit card or a mortgage, auto or student loan, or other open credit account or credit line in the U.S. any time from 1987 to May 28 this year will be able to choose from two free TransUnion services for a limited time, according to the settlement terms.

The law allows selling publicly available information but not private data. The Chicago company said it didn't violate the law, and it discontinued the practice in question in 2001.

Seeking to end a class-action lawsuit that has been pending for almost a decade, TransUnion agreed to offer one of two options to consumers:

1. Six months of TransUnion's creditmonitoring service free, giving consumers unlimited access to their credit reports and scores, and email notifications, when changes occur on their credit reports. The settlement values this service at $59.75.
2. Nine months of the credit-monitoring service, plus access to the credit scores used in insurance decisions, and TransUnion's mortgage simulator service, by which consumers can see how their credit score affects their mortgage rate. Value: $115.50.
   

Consumers choosing the first option sacrifice their right to enter a class-action claim against TransUnion, though they might still bring an individual case. Those who choose the second option sacrifice any further legal claims in the matter. Consumers won't need to provide a credit card to sign up for either service, and both services will simply end, meaning TransUnion won't automatically sign up people for a paid service when the free use expires, according to the settlement.

The settlement still needs to be approved by the court.

Consumer advocates say the usefulness of such services is mixed. Already, consumers can get one free credit report from each of the three main bureausTransUnion, Experian Group Ltd. and Equifax Inc. - every 12 months.

By: Andrea Coombes
Wall Street Journal; June 2, 2008