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Aug 18, 2008

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. Supreme Court. 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 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].
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