TransUnion settles largest class action lawsuit in historyTerry W. ClemansTransUnion, class action suit, litigation, Fair Credit Reporting Act, Terry Clemans
More than 160 million Americansby class size, the largest class
action litigation in United States historyhave reached a
preliminary settlement with the national credit repository
TransUnion. The 160 million consumers will be able to learn their
credit scores at no charge under the terms of the deal with
TransUnion, which has been in the works for more than a decade in
this long running litigation that went all the way to the U.S.
The case claimed that TransUnion mined data from their company's
consumer credit files to generate customized lists of consumers for
retailers, lenders and other businesses to buy for their direct
marketing programs. The process in question, one that TransUnion
discontinued in 2001, went beyond the normal practices of
assembling mailing lists and, according to the claim, violated the
Fair Credit Reporting Act by disclosing a person's private credit
information without proper authorization.
TransUnion has clamed since the very beginning that it did not
violate the law via the practice in question. "We understand that
many consumers are concerned about privacy and hope that this
settlement demonstrates our commitment to empowering consumers to
better understand, manage and protect their credit information,"
said Colleen Ryan, vice president of corporate and community
affairs for TransUnion.
Multiple suits were combined into one litigation class in
federal court in Chicago. TransUnion and the plaintiffs in that
case agreed to this preliminary settlement, which will require
court approval and is expected to be completed in September 2008.
The proposed agreement would entitle consumers to at least six
months of a TransUnion credit monitoring service, giving them
access to the latest information in their credit reports, as well
as their current scores, at any time. The settlement class includes
anyone who had any type of loan account between January 1987 and
June 16, 2008. One of the following two options would be available
for the consumer to select from: 1. A basic service would provide
free credit monitoring for six months. This normally retails for
$59.75, according to the settlement. Those who select this service
can also apply for a cash payment.
2. An enhanced service would provide nine months of free
monitoring, plus use of a "mortgage simulator" that lets consumers
see whether improving their credit score would affect their
mortgage rates and how much they could save if it did. This option
also includes access to one's insurance score, which is used by
some insurers to set rates (though California bars the use of these
scores). This settlement option is valued at $115.50.
Under the settlement, a credit card number would not be required
to sign up for either service, as is the case with many such
fee-based programs currently being offered. After the terms of the
free service have been met, TransUnion can market the settlement
class for a continued, payment-based extension of the program;
however, they could not charge for the extension unless it was
requested by the consumer.
The settlement also creates a $75 million fund that would be
used to notify class members about their credit and litigation
rights, to pay attorneys, and to pay any damages agreed to for
people who opt out of the class and sue TransUnion on the merits of
their own case. Any remaining money in the fund after two years
will be paid to people who applied for the cash option (number one
above). Consumers who received the enhanced service (number two
above) have no claim to apply for any money that may be left in the
fund. Claims can be filed by going to the settlement Web site at www.listclassaction.com
or calling (866) 416-3470.
Terry W. Clemans is the executive director of the National
Credit Reporting Association Inc. (NCRA). He may be reached at
(630) 539-1525 or e-mail [email protected]