1

 Report of the Committee on Banking and Currency, S. Rep. No. 91-517 (1969). 

2

 Section 603(d) of the FCRA defines “consumer report” as: “[a]ny written, oral, or

other communication of any information by a consumer reporting agency bearing on a consumer’s

[Public Record Version]

OPINION OF THE COMMISSION

By Thompson, Commissioner:

I. INTRODUCTION

In this information age, technological advances in information gathering and dissemination

have generated substantial benefits for American consumers by providing them with, among other

things, the strongest and most efficient credit markets in the world. In 1970, Congress recognized

the importance of personal financial data to these markets when it enacted the Fair Credit

Reporting Act (“FCRA” or “Act”). Congress expressly noted in the Act’s findings and statement

of purpose that the “banking system is dependent upon fair and accurate credit reporting” and

acknowledged the “vital role” of credit bureaus (called “consumer reporting agencies” under the

Act) “in assembling and evaluating consumer credit and other information on consumers.” 15

U.S.C. § 1681(a)(1) and (3). 

Under the U.S. credit reporting system, consumer reporting agencies (hereinafter

“CRAs”) collect consumer credit information from credit grantors and other sources, compile the

information into credit reports, and then sell the reports to banks and other lenders, as well as to

employers and insurance companies. Credit grantors have an incentive to provide data to CRAs

because they benefit from the credit reporting system as well. The effectiveness of this system

depends upon a constant flow of consumers’ credit information into large databases maintained by

CRAs. It also depends on accuracy and timeliness. As a result, CRAs, unlike other data

providers, have access to a broad range of continually-updated, detailed information about

millions of consumers’ personal credit histories. This information includes, for example,

consumers’ delinquencies and defaults, the types of credit accounts they have, when they obtained

credit, and additional information that banks and other lenders often use in determining whether to

extend credit. 

Although Congress understood the importance of CRAs’ access to such information

regarding millions of consumers, it also recognized the importance of protecting consumers’

financial privacy. In fact, legislative history reveals that one of the FCRA’s principal goals was to

protect the privacy of individuals whose sensitive credit and financial data are collected, used,

reviewed and transmitted by CRAs.1 Thus, in enacting the FCRA, Congress struck a balance

between these competing interests. While Congress did not disturb the ability of CRAs to collect

personal credit information, it did provide safeguards designed to protect the confidentiality of

these data. Specifically, Section 604 of the FCRA limits the circumstances under which a CRA

may disclose a “consumer report”

2

 - - the statutory term for information commonly referred to as
credit worthiness, credit standing, credit capacity, character, general reputation, personal

characteristics, or mode of living which is used or expected to be used or collected in whole or in

part for the purpose of serving as a factor in establishing a consumer’s eligibility for . . . credit or

insurance . . . [or] employment . . .” 15 U.S.C. § 1681a(d).

3

 As described infra, Trans Union may have discontinued some of the practices at

issue in this matter. To the extent it continues to engage in certain other of the activities at issue,

however, Trans Union’s FCRA violations are ongoing.

2

a credit report. For instance, Section 604 allows a CRA to furnish consumer reports to, inter

alia, persons with certain “permissible purposes.” These permissible purposes include: (1) the

extension of credit; (2) employment purposes; (3) underwriting of insurance; (4) determination of

license eligibility; (5) risk assessment for an existing credit obligation; and (6) legitimate business

need for the information. 15 U.S.C. § 1681b. Section 607 of the Act also requires CRAs to

maintain reasonable procedures to ensure that they only furnish consumer reports for the purposes

set forth in Section 604. See 15 U.S.C. § 1681e(a).

After careful consideration of the parties’ arguments and thorough review of the

substantial record in this case, the Commission concludes that Trans Union Corporation (“Trans

Union”), a CRA, violates or has violated Sections 604 and 607 of the FCRA through the activities

of its target marketing business.3 In connection with its consumer reporting business, Trans

Union receives various types of personal, credit information about consumers. Much of this

information constitutes a “consumer report” as that term is defined by Section 603(d). Trans

Union’s sale of consumer reports to target marketers without a “permissible purpose” under the

FCRA is a violation of the Act.

II. PROCEDURAL HISTORY

On December 15, 1992, the Commission filed an administrative complaint alleging, in

pertinent part, that Trans Union violated Sections 604 and 607(a) of the FCRA by 

compil[ing], for sale to clients, lists of consumers, based in whole or in part on information

contained in its consumer reporting database bearing on the characteristics enumerated in

Section 603, thereby creating consumer reports, and provid[ing] such consumer reports in

the form of target marketing lists to persons that do not intend to make a firm offer of

credit to all those consumers on the list and who intend to use the information for

purposes not authorized under [the FCRA].

In re Trans Union Corporation, 116 F.T.C. 1334, 1336 (1993). 

On September 20, 1993, Administrative Law Judge (“ALJ”) Parker entered a summary

decision in favor of Complaint Counsel. The Commission upheld that decision, ruling specifically

that Trans Union’s target marketing lists were “consumer reports” because the minimum criteria
4

 A “tradeline” is a segment of a consumer report that reflects a credit relationship

between a consumer and a creditor - - usually a debt or a potential debt owed by the consumer to

the credit grantor. An example of such an account relationship is a consumer’s Visa, American

Express or other credit card account. A typical consumer report contains multiple tradelines, and

each reveals specific information about the account relationship, including: the account holder’s

account number, name, address, telephone number, date of birth, social security number, any

generational suffix; the name and subscriber code of the credit grantor and its kind of business; the

open date of the account; the verified date on the account; the type of loan; the credit limit

assigned by the credit grantor; the payment patterns and history; the present status of the account;

and the closed date of the account. Public record information such as bankruptcies, tax liens,

foreclosures and civil judgments as well as collection accounts are also considered tradelines. See

Stockdale 872, 875/23--876/2, 888/5-24, 893/6-15, 894/4-12, 895/16--896/1, 896/19-23,

897/13--898/2; Botruff 2049/1-6; Weith 1844/18-22; Smith 3372/15--3373/15. 

3

for a consumer file appearing on any of the target marketing lists - - that the consumer had at least

two open credit accounts - - satisfied the definition of “consumer report” under Section 603(d) of

the Act. In re Trans Union Corporation, 118 F.T.C. 821, 869-70 (1994). A key part of the

Commission’s determination was its finding that the mere existence of two credit accounts, or

“tradelines,”

4

 constituted information “collected in whole or in part by [Trans Union] with the

expectation that it would be used by credit grantors for the purpose of serving as a factor in

establishing the consumer’s eligibility [for credit].” Id. at 861. The Commission also held that

target marketing is not a permissible purpose under the FCRA. Therefore, according to the

Commission, Trans Union violated the FCRA by disclosing consumer reports to persons lacking

any of the required permissible purposes.

In ruling on Trans Union’s appeal of the Commission’s decision, the United States Court

of Appeals for the District of Columbia Circuit agreed that target marketing was not a permissible

purpose under the Act. Trans Union Corp. v. F.T.C., 81 F.3d 228 (D.C. Cir. 1996). The Court

also held, however, that it was inappropriate for the Commission to use summary procedures to

decide whether Trans Union’s target marketing lists were consumer reports because the question

presented a genuine issue of material fact. Consequently, the Court remanded the case to the

Commission to resolve two primary questions. The first is factual - - whether there is sufficient

evidence to support the finding that Trans Union’s target marketing lists are consumer reports. 

The second question is a legal one - - if we find that Trans Union’s target marketing lists are

consumer reports, does the FCRA pass constitutional muster?

On July 31, 1998, Administrative Law Judge James Timony issued an Initial Decision and

Order on remand holding that Complaint Counsel provided sufficient evidence to show that Trans

Union’s lists are “consumer reports” under the Act and that Trans Union disclosed them to

entities who lacked a permissible purpose. This disclosure violated Sections 604 and 607(a) of

the FCRA. Judge Timony also held that the FCRA, as applied to Trans Union’s practices, is
5

 References to the record are abbreviated as follows, using the following

hypothetical examples:

Initial Decision ID at 200.

Initial Decision Finding IDF-500.

Complaint Counsel Exhibit CX-500.

Trans Union Exhibit TU-500.

Trial Transcript testimony Jones 1234/56-78.

Deposition Transcript testimony Jones CX-100 at 123/45-46.

Trans Union’s Appellant Brief TUAB at 200.

Complaint Counsel’s Answering Brief CCAB at 200.

Trans Union’s Reply Brief TURB at 200.

Complaint Counsel’s Proposed Findings CCPF at 200. 

Trans Union’s Proposed Findings TUPF at 200.

4

constitutional. Trans Union appealed both rulings.5 

After reviewing the full record in this case, including the extensive arguments of the

parties, we adopt the ALJ’s July 1998 findings and conclusions to the extent that they are

consistent with those set forth in this opinion.

III. STANDARD OF REVIEW

The Commission reviews the decision of the ALJ under a de novo standard. FTC Rules of

Practice, Rule 3.54(a). The Commission can, however, give some deference to the ALJ’s

credibility determinations because, as the trier of fact, the ALJ had the opportunity to “closely

scrutinize witnesses’ overall demeanor and to judge their credibility.” In the Matter of Horizon

Corp., 97 F.T.C. 464, 857 n.77 (1981). 

IV. FACTUAL BACKGROUND

A. Trans Union’s Business

Trans Union is a Delaware corporation whose principal place of business is located at 555

West Adams Street, Chicago, IL 60661. Trans Union’s primary business is credit reporting and it

is a CRA under Section 603(f) of the Act. (Rodgers CX-191 at 27/3-7). As a CRA, Trans

Union collects credit information about millions of American consumers from numerous credit

grantors and others, compiles this information into credit reports and sells the reports to credit

grantors nationwide. (Connelly 2588/19–2590/18; Pendleton 404/12--405/9; Johnson

1206/16--1209/7). Trans Union’s main competitors in the credit reporting business are Experian

(formerly TRW) and Equifax. (Rodgers CX-191 at 47/10-12). These companies are also CRAs.
6

 Each month CRONUS takes in 85,000 updates from credit grantors and data

providers and 1.8 billion tradelines. (Stockdale 874/4-10, 908/1-19).

5

The millions of pieces of consumer information Trans Union receives every month are

maintained in an extensive database called CRONUS. (Weith 1867/19--1870/9; Botruff CX 181

at 19/14-22).6 The information in CRONUS comes from credit grantors - - including banks,

mortgage companies, credit unions and auto dealers - - collection agencies, public records and

others. (Stockdale 873/22-25). The information is very current as Trans Union receives new

data every day and updates CRONUS weekly. (Botruff CX 181 at 30/18--31/8). Information

compiled on a specific consumer within CRONUS is called a consumer file. 

In addition to its credit reporting business, Trans Union also sells a variety of target

marketing products through its subsidiary, Performance Data (formerly Trans Mark and Trans

Union Lists). Performance Data creates lists of the names and addresses of specific classes of

consumers and sells them to target marketers who in turn solicit the consumers to purchase goods

and services. Performance Data employs 46 people, including 10 salespersons. (Davis 37/25--

38/4). At the beginning of 1998, Performance Data had 440 customers; during 1997, it generated

over $34 million in sales. (Davis 48/8-10, 141/13-14). Performance Data’s sales comprise 2% of

the target marketing industry. (Davis 3322/15-18). Hereinafter, unless otherwise noted, our

references to Trans Union’s target marketing business include Performance Data’s activities.

As a CRA, Trans Union is in a special position. Trans Union has access to a vast array of

very current and detailed consumer information from its credit reporting business which affords it

a distinct advantage as a target marketer. Trans Union takes consumer information from

CRONUS to create two primary databases called the Master File and the Standard Characteristics

database. (Cabigon 1365/13-18; Kinsinger 2017/19-23; Weith CX-196 at 179/11-13). Trans

Union offers different target marketing products based upon the information gathered in these

two databases as well as data taken directly from CRONUS. See chart detailing Trans Union’s

various target marketing products, appended hereto as Figure 1. For the reasons explained in

detail infra p. 13, the fact that Trans Union uses CRONUS information in its target marketing

business is significant because CRONUS information is far richer and more detailed than the data

collected and used by non-CRA competitors who sell target marketing lists. Trans Union is also

the only CRA that sells to target marketers an array of personal credit information obtained from

its credit reporting database.

1. The Master File

The CRONUS-derived Master File is one of the databases Trans Union uses for target

marketing. (CX-72-C). It contains information on 160 million people and 105-110 million

households. (Weith 1859/8-18; CX-333). Trans Union updates the Master File three times per

year. (Cabigon 1366/10-12; Davis 62/16--63/7). 

In order for Trans Union to include a CRONUS consumer file in the Master File, thereby
6

making the consumer’s name and address available for target marketing purposes, the consumer

file must satisfy several minimum criteria. These criteria have changed over time. Prior to

January 1998, each CRONUS consumer file had to show at least two open tradelines with one of

the tradelines verified - - i.e., that some reported activity took place - - during the preceding 12

months. (Cabigon 1372/18--1373/7; CX-329-A; Weith CX-196 at 197/24--198/14). In

addition, a qualifying tradeline could not be closed or an account about which there was a

consumer dispute, and could not be a collection record or public record. These criteria are

hereinafter referred to as the “pre-1998 Minimum Criteria.” (Weith CX-196 at 191/7-15, 227/1-

5; Cabigon 1374/5-22). 

In January 1998, in order to be included in the Master File, Trans Union began to require

CRONUS consumer files to contain two tradelines active within the last six months or one

tradeline active in the last six months with an address confirmed by an outside source. We refer

to these later criteria as the “post-1997 Minimum Criteria” and both sets jointly as the “Minimum

Criteria”. (Weith 1830/23--1831/4; Cabigon 1386/14--1388/7; CX-332-A; CX-339-A). As

with the pre-1998 Minimum Criteria, the qualifying tradeline could not be a collection record or a

public record. (Cabigon 1374/12-21; CX-332-A; CX-340-A).

Trans Union claims that the two tradeline, pre-1998 Minimum Criteria did not reveal

consumer credit information and that the two tradeline minimum was only important because it

confirmed, by two sources, the subject’s current name and address. TUAB at 11. Statements

made by Trans Union during the relevant time and in its regular course of business, however, belie

this simple characterization. For instance, Trans Union’s promotions boasted that the Master File

is a list of “135 million financially active individuals”(emphasis added), that “[a]ny adult with at

least two active tradelines is represented,” and that a person with no activity in a 12 month period

- - i.e., making payments or establishing credit - - is dropped from the Master File. (CX-70-A;

CX-69-A; CX-58-C). We agree with Trans Union’s written characterizations and find that the

“two-tradeline minimum” criterion indicates more than just a confirmed address. It instead

reveals a significant fact about consumers in the Master File, i.e., that they are current, at least

somewhat active users of credit. 

2. Trans Union’s “Master File / Selects” Product

While the Master File contains names, addresses and other demographic information on

people who meet the Minimum Criteria discussed above, it also is frequently enhanced with the

addition of other personal, often credit-related, information on each individual. This enhancement

enables Trans Union to offer its target marketing customers the opportunity to select, from the

160 million consumer files in the Master File, names and addresses of a smaller set of consumers

who meet certain criteria specified by the target marketing customer. The criteria Trans Union

uses to create these subsets are called “indicators” or “selects,” and Trans Union generates half of

them from its consumer reporting database CRONUS. (Cabigon 1438/12-25).

Trans Union’s target marketing customers use the Master File / Selects product in two
7

 In the lending industry, having a finance loan indicates that the consumer has

approached a lender of “last resort” and is more likely to need credit. (Rapaport 792/17--

793/21). Trans Union expressly advised its mortgage lender / customers to use the homeowner

and finance tradeline selects because the finance tradeline select provides names of consumers

who have “generally had trouble with their credit in the past and are highly responsive to credit

offers.” (CX-33; CX-68-A).

7

ways. Some customers provide a list of consumers to Trans Union and purchase Master File

select information regarding those customers. (Davis 33/22-25). Other customers request that

Trans Union extract from the Master File names and addresses of those consumers who satisfy

criteria selected by the customer. (Davis 34/1-5). In other words, Trans Union’s target

marketing customers can choose from a menu of selects and ask for a tailored list of consumers’

names and addresses who, for example, have a bank card, an open mortgage, but never have

obtained short term (30/60/90 day) financing. Trans Union sells these lists for one-time use by its

customers either by rental or by license and charges a “base price” per thousand names, with

additional charges per thousand based on the selects that the customer has chosen. (Davis 44/6-

24, 64/6-22, 65/3-14).

Prior to October 1997, when it made certain changes in its business practices (see infra

pp. 10-11), Trans Union permitted its target marketing customers to order from the Master File

lists of the names and addresses of consumers who had the following types of credit accounts:

C Automobile - - indicating whether the consumer has an auto loan or lease not more than

five years old; a second auto loan or lease not more than five years old; and for the most

recent first and second loan or lease, the open date, expiration, and loan type, and range

indicating high credit value (i.e., highest amount ever owed);

C Bank Card - - indicating whether the consumer has an open bank card, including the open

date of the most recent bank card account; 

C Premium Bank Card - - indicating whether the consumer has an open premium bank card,

defined as a bank card with a credit limit that exceeds $9,999, and the open date of the

most recent premium bank card account; 

C Department Store Card - - indicating whether the consumer has an open department store

card account, including the open date of the most recent department store card account;

C Finance Tradeline - - indicating whether the consumer has an open account with a finance

company, the open date of the most recent account with a finance company, and whether

the account type is a mortgage or auto finance loan;7

C “30/60/90 day” Finance Tradeline - - indicating whether the consumer has a open

account with a finance company with a 30, 60, or 90 day loan term;

C Mail Order - - indicating whether the consumer has an open account with any of a number

of mail order companies;

C Mortgage - - indicating whether the consumer has a first mortgage and/or second

mortgage; for the most recent first and second mortgage, the open date, closed date, loan

type (refinance, secured mortgage, secured home improvement loan); and range indicating
8

 IDF-37; TUPF at 186; CX-1; Cabigon 1378/12-19.

8

high credit value;

C Student Loan - - indicating whether the consumer has a student loan, the type of loan, the

open date of the most recent student loan, whether it is closed, and the high credit amount

(range); and

C Upscale Retail Card - - indicating whether the consumer has an upscale retail card, based

upon the National Retail Federation’s listing of “prestigious” stores, and the open date of

the most recent upscale retail card.

Trans Union also offered its target marketing customers the option to purchase other types of

“inferential” selects, including: 

C Head of Household - - identifying the person in the household with greatest number of

tradelines;

C Length of Residence - - identifying people who have maintained their residence for more

than a certain period of time based on duration that credit grantors report on person at

that residence or based on mortgage open dates; 

C Singles - - identifying people without joint credit accounts; and 

C Drivers - - identifying individuals with either an auto loan or a tradeline with a business

that issues gas cards and thus presumably own or lease a car.8

The record contains ample evidence of how Trans Union’s customers used the Master File

/ Selects product. For example, Mercantile Mortgage Co. obtained information from Trans Union

to advance its telemarketing promotion which offered homeowners who had been denied credit

elsewhere the opportunity to reduce their monthly mortgage rates by refinancing their mortgage,

thereby freeing up funds for “home improvements,” a “new car,” or a “dream vacation.” (CX18). Mercantile purchased from Trans Union a list of consumers in Mercantile’s area of business

(Ohio), with telephone numbers (necessary for telemarketing promotion), who also had single or

multiple mortgages (an important minimum eligibility factor) and credit with a finance company. 

Id.

Ramsay Mortgage purchased a target marketing list from Trans Union for its mail offer to

lower consumer debt payments, clean up credit, consolidate debt, and/or refinance a mortgage. 

Ramsay obtained for the Spotsylvania, Virginia area a list of consumers with a mortgage, a bank

card, and a retail card. (CX-25). Another lender, the Mortgage Banc, purchased from Trans

Union, for certain counties, lists of homeowners, with phone numbers, who used finance

companies, who had been at their residence for 6-15 years, and who also had a bank card. (CX23-C). In another example, Trans Union sold a target marketing list to Rubinstein Bros., a retail

clothing store offering a no-fee charge account to promote its new “Ladies Department.” 

Rubinstein Bros. purchased a list of females from certain geographical areas, who were between
9

 Most of these lenders sought lists of consumers with some type of finance

tradeline. See supra n.7.

9

age 25 and 75 and had upscale retail cards and phone numbers. (CX-35).9

3. Trans Union’s Standard Characteristics / Model Products

As previously described, Trans Union also maintains a second database, called the

“Standard Characteristics” or “Attribute” file. This file contains 313 attributes on each CRONUS

consumer who meets the Master File Minimum Criteria. (Cabigon 1373/23--1374/4; CX-329-

A). Trans Union used this personal credit information to create certain proprietary models that it

offered to target marketers until October 1997. These proprietary models assign a value, or

“score,” to each consumer file in the following ways through the following products: 

C E-Val. A scoring system that, using information in the Standard Characteristics file,

estimates the amount of equity available in a consumer’s home. A Trans Union customer

can purchase a consumer’s E-Val “score” showing: (1) the estimated actual amount of

equity in the consumer’s home; (2) the percentage of equity over home value; and (3) the

home value range. (CX-1-I-J; CX-118-B; Davis 134/12--135/11).

C TIE. The TIE scoring system provides a consumer’s estimated income within a $5,000

range (culminating in an over $100,000 category). (CX-1-X). TIE estimates income by

modeling 23 attributes in the Standard Characteristics file. (CX-120; CX-119-I;

Wiermanski 1803/17-24). 

C SOLO. The Solo model places consumers into one of 40 “clusters,” based on a modeling

of 35 attributes in the Standard Characteristics file. (Wiermanski 1736/23-25; CX-114;

Davis 67/2-13). SOLO evaluates individual behavior and describes tendencies based on

how individuals are using credit. (IDF-85). Examples of SOLO cluster categories are:

“Urban Ethnics,” “Urban Upscale,” “Empty Nesters,” “Single Strugglers,” “Kids and

Cars.” (CX-114-F).

C P$YCLE. This model also assigns people to one of 60 “buckets” that are intended to

estimate a consumer’s income producing assets. (Pellizzon 3446/16--3447/3, 3461/12-

15; Davis 109/16--110/24, 214/1-9). Categories of buckets include, “The Wealth

Market,” “Upscale Retired,” “Downscale Retired.” (TU-22-B).

C PIC. The PIC product uses the Standard Characteristics file to model the likelihood that a

person owns financial service products. (TU-20; Weith 1864/6-10). On the Master File,

the PIC option will indicate whether there is a negative or positive propensity to purchase,

among other things, a home equity loan, a mutual fund, an installment loan or term life

insurance. (CX-1-S).
10

 Citibank does not permit Trans Union to use its credit card account numbers for

reverse-append disclosure of names and addresses through Trans Link. (Marquis CX-188 at

147/20--148/1).

11

 This information may not reflect the person who actually used the card with the

merchant if the account is a joint account. (Weith 1824/16--1825/17, 1827/4-15). 

10

4. Trans Union’s Other Target Marketing Products

In addition to its Master File / Selects product and the Standard Characteristics models,

Trans Union offers several other products derived from CRONUS, including: 

C TransLink / Reverse Append. This product provides merchants with names and addresses

of bank card holders. The merchant submits to Trans Union a list of bank card numbers

that were used to make purchases from the merchant. Trans Union then retrieves from

CRONUS the name and address of the primary cardholder.10 (Weith 1823/22--1824/14;

Dexter 1305/24--1307/6; Davis 89/25--90/10; CX-126; CX-132-D; CX-133-B; CX266). While a customer name is presumably already available to the merchant,11 the

address is not. TUAB at 4. By purchasing TransLink, merchants can obtain a useful list

of names and addresses without asking their customers for this information. TransLink is

among Trans Union’s largest selling target marketing services and Trans Union is the only

CRA that provides this type of “reverse append” service. Until September 30, 1997,

Trans Union appended SOLO, TIE and age data to TransLink lists; it currently only

appends age data. (Dexter 1236/22--1237/25; Smith 1488/23--1489/5; CX-125-E; CX129).

C New Issues File. This file contains names and addresses of individuals who received credit

within the last 90 days. It also discloses when an individual obtained the credit and the

type of credit issued. (CX-4; IDF-106; Davis 42/16--43/1).

C Emerging Consumers File. This file included individuals with only one tradeline from the

prior twelve months. (Cabigon 1373/12-22; CX 329-F). To qualify, the tradeline must

be open. (IDF-107). Trans Union discontinued the Emerging Consumers File in part

because it feared that it might be “communicating information that we shouldn’t be

communicating.” (Davis 89/18-20).

5. Changes in Trans Union’s Practices

The target marketing practices described above led the Commission to issue its complaint

in 1992. In October 1997, contemporaneous with the effective date of the 1996 FCRA

amendments, Trans Union discontinued some of the practices that were the most problematic

under the FCRA. Specifically, the company stopped providing certain information about open

dates of loans, high credit amounts, most loan types, and whether a student loan was closed. 
12

 Trans Union continues to offer these products to entities extending so called “firm

offers” of credit, a practice allowed under the prescreening provisions of the FCRA, described

infra p. 18.

11

Trans Union also ceased providing to target marketing customers its modeled products (e.g., EVal, PIC), its New Issues File, and its Emerging Consumers File.12

Trans Union changed its practices shortly after the 1996 FCRA amendments authorized

for the first time civil penalties of $2,500 per FCRA violation (i.e., $2,500 per prohibited

disclosure of consumer financial information). 15 U.S.C. § 1681s(2)(A). Trans Union’s General

Counsel Oscar Marquis stated that the company stopped providing certain lists in light of the new

statute’s provision for civil penalties. (Marquis CX-188 at 174/23--175/6, 22-25). In the words

of Stephen Dexter, a senior account manager with Performance Data, “[a]s of 10/1/97, the risk

outweighed the reward for violating the FCRA.” (Dexter 1280/19--1281/10). Jan Davis, Vice

President and General Manager at Performance Data, also testified that Trans Union “had gone

from an environment where the worst thing that could happen is that we would have to stop

selling certain lists to a world where there were significant financial penalties.” (Davis 142/21-

25). “[B]efore it was a cease and desist penalty, it now became a $2,500 per occurrence penalty.” 

(Dexter 1280/19--1281/10).

In December 1997, however, Trans Union reintroduced the practice of selling “type of

tradeline” information - - e.g., information reflecting a specific type of account relationship

between a credit grantor and a customer. Thus, Trans Union currently offers its customers access

to the following information about consumers in its Master File: whether the consumer has an

auto loan; a second auto loan; a bank card; a department store card; a finance loan; a 30/60/90

day finance loan; a mortgage; two or more mortgages; a gold, platinum or optima card; a student

loan; an upscale retail card; seven kinds of business tradelines; a mail order trade; and auto loans. 

(CX-342; CX-315-D, E, G-M, Q-W; CX-332-B; Cabigon 1426/9-23, 1427/18--1428/3,

1429/9--1430/2; Weith 1832/2--1833/6).

B. Trans Union and Its Competitors

Trans Union has both CRA and non-CRA competitors in the target marketing industry. 

But Trans Union differs from its CRA rivals - - Experian and Equifax - - in at least two significant

respects. First, Trans Union bases its target marketing lists on a minimum requirement of some

tradeline activity. Although Experian, like Trans Union, also derives its target marketing database

from its consumer reporting database, it does not require that a tradeline exist. (Smith 3428/18--

3429/18). Similarly, Equifax also does not apply a minimum tradeline criterion. Its target

marketing activities are limited to providing certain data to Claritas, Inc., which then offers target

marketing products to customers. (IDF-40, 162-163).

Second, Trans Union is unique among CRAs because it provides credit data on

individuals. By contrast, the other CRAs provide consumer credit information on an
13

 “Zip-plus-four” is the Postal Service’s more refined zip code system which adds

four additional digits to identify a specific area within a zip code location.

14

 One of Trans Union’s promotional letters states that “Experian comes closest as a

competitor, but since they cannot provide to you any credit based data only the demographic data

obtained from the credit reports (abiding by the Consent Decree with the FTC) . . . our data far

outweighs their strength.” (CX-70-B). 

12

“aggregated” basis, i.e., information about a group of people. Both Experian and Equifax

aggregate information about individuals’ credit characteristics on a zip code or “zip-plus-four”

geographic basis.13 With zip-plus-four aggregation, a company essentially pulls all the credit

reports of individuals within a geographical area covering 5-15 households (the zip-plus-four

geographical area), adds all the credit data together, and then divides by the number of people in

the area who have credit reports. (Smith 3290/11-24). This aggregation “shows what a typical

consumer looks like in that area as opposed to the specific consumer in the area.” (Smith

3290/14-18; TU-112; TU-113). 

Experian does provide some “individual-level data,” but it is limited by a consent

agreement that the company entered into with the Commission in 1993 (hereinafter “TRW

Consent”). Pursuant to the TRW Consent, Experian can disclose from its consumer reporting

database only the following information about individuals: name, address, telephone number,

mother’s maiden name, zip code, year of birth, age, any generational designation, social security

number, or substantially similar identifier. (TU-109; Smith 3287/11--3294/11). This information

is commonly referred to as “above the line” information because of its physical location on most

consumer reports. See, e.g., TU-61(a). The TRW Consent prohibits the disclosure of “belowthe-line” information, i.e., most tradeline data including credit performance information.14 TRW /

Experian previously offered a reverse append product, but apparently discontinued the practice

based on the TRW Consent’s provisions. (Smith 3295/9-17). The TRW Consent agreement

does not address the legality of Experian’s current practice of disclosing credit information on an

aggregated basis. 

Equifax, Trans Union’s other CRA competitor, does not offer any individual credit data in

its target marketing business. Prior to 1997, Equifax’s subsidiary, National Decision Systems

(“NDS”), offered “Ace Indicators,” a product which disclosed information based on 39 credit

performance characteristics aggregated at the zip-plus-four level. In 1997, however, Equifax sold

NDS to Claritas, Inc., which now continues to use Equifax data at zip-plus-four-level to offer the

Ace Indicators product. (TU-103; TU-114; TU-177(c); Pellizzon 3440--3446). Claritas edits

its ACE Indicators data to ensure that data are not released that describe one household, one

record, or one individual. This “confidentiality edit” is applied where there are too few records in

a zip-plus-four area. (Pellizzon 3471/12--3472/4). 

Trans Union also faces competition from various non-CRAs. The industry leaders in this

category are R.L. Polk & Company (“Polk”), ACXIOM Corporation (“ACXIOM”), Metromail
13

Corporation (“Metromail”), and First Data Solutions (formerly Donnelly Marketing)(“First

Data”). (Davis 161/5-16; Cleary 2942/4-18; Hinman 2199/19--2200/17; M. Smith 3299/22--

3300/8). These competitors also furnish consumer information on an aggregated basis, e.g., at

the household level or broader. (IDF-157). While these companies obtain data from a host of

sources, including state motor vehicle departments, county records, telephone directory white

pages, census data, and self-reported data from surveys or product registration cards, such

sources do not compare with the vast scope of information in Trans Union’s credit reporting

database. CRONUS information covers a wider population and includes a more comprehensive

range of instantly available information on individuals. CRONUS data are also significantly more

accurate and timely.

The difference between Trans Union’s target marketing products and those its competitors

sell is perhaps best described in Trans Union’s own words: Trans Union states that its Master File

contains “the freshest” and “most comprehensive” data due to its “robust and extensive source of

the original credit based information” and that Trans Union has the largest data file of consumer

credit information in the United States. (CX-268-A; CX-264-A; CX-75-B). Trans Union

further describes the Master File as the “richest source of individual-level data available” (CX321-J), and asserts that its database is “kept fresh and current by nearly two billion updates

supplied by credit grantors every month.” (CX-72-B). Finally, Trans Union touts its advantage

over other target marketing list providers, due to its ability to capitalize on the information in its

credit reporting database. Trans Union boasts that it is:

“a unique provider of credit-based marketing information. Our database is

unmatched when compared to traditional direct marketing vehicles on the market

today.” (CX-260-B). 

“[N]o one offers you a greater source of true individual-level data than we do . . . .

This unique resource includes financial and behavioral data on over 140 million

consumers . . . This information is not only current, it is also highly accurate . . . .

All information is based on actual behavior - - not self-reported or neighborhood

values. Even our estimates - - of income, net worth, income producing assets, and

home market value - - are modeled from actual observations for each individual in

our file. 

(CX-83-C). Such statements by Trans Union provide insight into the nature of the data it collects

as a CRA and sells to target marketers.
15

 We are mindful that, to the extent that Section 603(d) raises constitutional

questions, we must construe the statute where fairly possible to eliminate such questions as long

as such construction is not plainly contrary to Congress’ intent. United States v. X-Citement

Video, Inc., 513 U.S. 64, 78 (1994). 

16

 “The first element does not seem very demanding, and we do not understand Trans

Union to even contest the proposition that a person’s having two tradelines ‘bear[s]’ on one or

more of the seven enumerated factors.” Trans Union, 81 F.3d at 231.

14

V. FCRA ANALYSIS:

ARE TRANS UNION’S TARGET MARKETING LISTS 

"CONSUMER REPORTS" UNDER THE FCRA?

A. Introduction

As discussed above, Trans Union sells lists of consumer names and addresses to its target

marketing customers. In creating these target marketing products, Trans Union applies various

criteria to identify those consumers in its large database, CRONUS, who possess specific creditrelated characteristics. The resulting lists thus communicate far more information to target

marketers than simply names and addresses. A purchaser of a Trans Union target marketing list

knows that every consumer included has at least one tradeline and possesses whatever additional

characteristics the purchaser has specified.

A key question in this case is whether Trans Union’s target marketing lists fall within the

Act’s definition of “consumer report.” If they do, then Section 604 requires that Trans Union sell

them only to entities who have a “permissible purpose” as defined by the Act. According to the

court of appeals, target marketing is not a permissible purpose. Trans Union, 81 F.3d at 230. 

Thus, if Trans Union’s lists are consumer reports then Trans Union has violated the FCRA by

disseminating those lists for target marketing purposes.

Trans Union’s target marketing lists qualify as consumer reports if they communicate

information that: (1) bears on a consumer’s “credit worthiness, credit standing, credit capacity,

character, general reputation, personal characteristics, or mode of living” and (2) is “used or

expected to be used or collected in whole or in part” to serve as a factor in determining credit

eligibility. 15 U.S.C. § 1681a(d)(1) (“Section 603(d)”). Our determination of whether Trans

Union’s lists are consumer reports does not require a mere application of fact, but instead requires

a close examination and interpretation of Section 603(d).15

The court of appeals determined that the tradeline information in Trans Union’s lists meets

the first prong of the consumer report definition - - i.e., it bears on one or more or the seven

enumerated factors.16 With respect to the second prong, however, the Court held there was

insufficient evidence to support the Commission’s 1994 finding and remanded the case back to the

Commission, stating:
17

 “Existence of a tradeline” refers to the mere existence of tradeline information as

determinative of whether the information disclosed is a consumer report under the FCRA. This

term is distinct from the term “type of tradeline” which refers to the character or type of

information that is disclosed. See discussion infra pp. 20-26.

18

 Under Section 603(d), it is not necessary to show that the information 

communicated by the target marketing lists, standing alone, could be used to make a credit-related

decision. We need merely determine that the information is used or expected to be used as “a

factor” in such a decision. Trans Union, 81 F.3d at 233. Something serves “as a factor” if it

“‘contributes to the production of a result.’” United States v. Wilson, 896 F.2d 856, 858 n.3 (4th

Cir. 1990), citing Webster’s 3rd International Dictionary, 1971. 

19

 In 1995, the Commission took the position before the court of appeals that Trans

Union’s lists, based on the “existence of two tradelines” feature, were “collected for the purpose

of” serving as a factor in credit eligibility decisions. The court of appeals rejected this argument

on the grounds that the “‘existence of a tradeline’ seems not so much ‘collected’ by Trans Union

15

On remand, if the FTC wishes to classify existence-of-tradeline17

information as a consumer report, it must gather evidence that

indicates that Trans Union intended the mere existence of a

tradeline, as distinguished from payment history . . . to serve as a

factor in credit-granting decisions, or, of course, that someone used

or expected it to be used for that purpose. Evidence - - lacking

here - - that credit decisions could be made, even in part, on such

“existence” information might be probative of Trans Union’s

intent. If under this standard, tradeline-existence information is

found not to [be covered by the definition of consumer report], the

FTC may of course embark on a similar inquiry about any individual

list criterion to which it objects. 

Trans Union, 81 F.3d at 233 (footnotes omitted)(emphasis added).

With this direction in mind, we have reviewed what is now a full record in this case and

find that the existence-of-tradeline information, as well as other information Trans Union

disclosed in its target marketing lists, meets the Section 603(d) definition of a consumer report. 

We therefore conclude that Trans Union violated the FCRA by selling consumer reports to target

marketers who lacked a statutorily permissible purpose. 

In reaching this conclusion, we examined Trans Union’s various target marketing lists - -

the Master File / Selects, proprietary models, and reverse append products - - and find that

information disclosed through these products is the type of information that is “used” and/or

“expected to be used” in whole or in part18 for the purpose of serving as a factor in establishing a

consumer’s eligibility for credit.19 Accordingly, these products are consumer reports and Trans
as created by it for organizing the nuts-and-bolts payment data upon which credit decisions are

made.” Trans Union, 81 F.3d at 232. On remand, Complaint Counsel and Trans Union have

focused their argument on the used and expected to be used elements of the definition. 

20

 The Commission’s argument before the court of appeals focused on the relevance

of Trans Union’s data to consumer’s eligibility for credit, and not to insurance, employment, or

other items set forth in Section 603(d). The court of appeals followed suit as did the parties

following remand. Accordingly, we limit our analysis to credit eligibility.

21

 We also stress that, although the FCRA does not prohibit Trans Union from

disclosing most demographic information, disclosure of such information may raise significant

privacy concerns and may facilitate misuses including identity theft.

22

 As noted, the TRW Consent permits Experian to use age information from its

consumer reporting business for target marketing purposes. The TRW Consent is not before us in

this matter and it is without precedential effect to this opinion.

23

 Through the 1996 amendments to the FCRA (effective September 30, 1997),

Congress included an additional statutory permissible purpose - - “prescreening.” The FCRA

16

Union cannot lawfully sell them for target marketing purposes. 

We also analyzed the demographic information that Trans Union maintains in CRONUS

and find that, based on the record before us, most of that information - - including name, mother’s

maiden name, generational designator, address, zip code, telephone number, and social security

number - - does not constitute a consumer report because there is no showing that it is used or

expected to be used as a factor in determining credit eligibility.20 We conclude, however, that

Trans Union, as a CRA, cannot lawfully disclose age information to target marketers because the

record in this case shows that lenders use age as a credit factor and age bears on credit capacity.21

Accordingly, products that Trans Union creates by way of its consumer reporting business that

are based upon, or contain, references to age are consumer reports under Section 603(d) and their

disclosure for target marketing purposes violates Section 604 of the Act.22

B. Analysis of Target Marketing Products

1. Background

To determine whether the information communicated through Trans Union’s target

marketing lists is “used or expected to be used” in credit eligibility decisions, we reviewed record

evidence detailing the various factors lenders use in evaluating credit eligibility. We focused in

particular on the factors that are important in calculating credit scores - - a tool that many lenders

use in evaluating credit eligibility. We also examined the factors that are important to lenders

offering credit in prescreening promotions.23
amendments allow consumer reporting agencies to provide to a credit grantor names and

addresses of consumers meeting certain credit-related criteria so long as the credit grantor makes

a firm offer of credit or insurance to the recipient. Furthermore, to afford consumers privacy

protection, individuals receiving a prescreened offer must be told that they were chosen because

they met certain criteria, that they have the right to opt out of appearing on future prescreened

offer lists, and the procedures for opting out. 15 U.S.C. § 1681m(d)(1). 

24

 The first step is called “scorecard segmentation” and is useful because isolating a

group with similar traits within a population can improve the predictive quality of the scoring

model. (Rapaport 685/1--686/11, 767/13 --768/24; CX-88-E). After determining the predictive

characteristics, FICO assigns values to “attributes” within each predictive characteristic - - e.g.,

four bank cards within “number of bankcards” characteristic. The sum of the values of the

attributes is the credit score. (Rapaport 687/16--688/6, 769/4-23, 851/2-17). Trans Union’s

credit scoring witness, Dr. John Coffman, flatly contradicted Mr. Rapaport by testifying that

individual attributes have no meaning in credit scoring and that it is the combination taken as a

whole that has value. (TUPF at 92). Having seen both witnesses testify, the ALJ found Mr.

Rapaport more credible and we give deference to this determination. See In the Matter of

Horizon Corp., 97 F.T.C. at 857 n.77. Moreover, based upon our review of the record, we find

Mr. Rapaport’s testimony to be more persuasive because it was based on Trans Union’s own

credit scoring models.

25

 FICO has partnered with each of the three major credit bureaus to develop credit

risk scoring products. (Rapaport 680/8-21). 

26

 Industry Options, refinements of the EMPIRICA model, offer scores for the bank

card, personal finance, installment and auto loan industries. (Rapaport 692/1-18).

17

Credit scoring systems use past credit information and other data to build models that

predict a consumer’s likely future credit performance. (Rapaport 673/15-23). Credit grantors 

- - such as credit card issuers, retailers and finance companies - - use credit scores in deciding

whether to grant an applicant credit, to make a preapproved credit offer, to reissue, increase or

decrease a credit line, or for over-limit authorizations. (Rapaport 675/1-8, 680/23--682/16).

Most of the data used for credit scoring comes from CRAs. (Coffman 3825/18--3826/2). 

Mr. Michael Rapaport of the Fair Isaac Company (“FICO”), the leading developer of

credit scoring models, testified that credit scoring combines similar consumer credit files and then

isolates the key 10 or 15 factors that are predictive of future credit performance for that group. 

(Rapaport 686/25--687/9, 779/20-25).24 The record demonstrates that Trans Union was aware

of the factors that credit grantors use to predict future credit performance because Trans Union

partnered with FICO to create its own models.25 (Rapaport 672/25--673/6, 680/8-21). In fact,

Trans Union and FICO together created scoring models to predict future credit risk generally

(EMPIRICA), the likelihood a consumer will go bankrupt (Horizon), and the likelihood a

mortgage account will become delinquent (Uniquote).26 (Rapaport 690/15--691/7, 692/21--
27

 Trans Union’s subsidiary, Marketing Services, Inc., is engaged in the business of

prescreening and reviews approximately four to five billion consumer files per month against

criteria provided by approximately 100 to 150 prescreening clients per month. (Rock 2115/24--

2116/13).

18

693/7, 799/11--803/15). By working with FICO, Trans Union knew the categories of information

in a consumer’s credit file that lenders used as predictive characteristics in credit scoring, and

hence in credit eligibility decisions.

Prescreening provides another way to determine the factors that bear on credit granting

decisions. Trans Union was similarly aware of the prescreen criteria credit grantors use to make

firm offers of credit.27 In prescreening, the credit grantor mails a firm offer of credit to consumers

who meet certain specifications or criteria. (Koppin 482/21-23, 488/20-23; Pendleton 357/22--

359/5). CRAs like Trans Union generate and sell lists of consumers meeting the specified criteria. 

(Koppin 583/2-9; Zancola 668/22--669/1). For example, Chase Manhattan Bank sends firm

offers of credit to consumers who meet its prescreen criteria, e.g., three open tradelines, no

charge-offs, no payments 60 days past due. (CX-280-L). The specifications or criteria that credit

grantors use in prescreen offers are based on statistical analyses of elements to predict credit

behavior. (Koppin 489/19--490/11, 511/3-14; Pendleton 360/5-8; Zancola 669/21--670/10;

McCoy 599/7-18, 606/21--607/7). 

The record in this case includes substantial evidence of factors important to credit scoring

and prescreening criteria. The record demonstrates that much of the information Trans Union

discloses in its target marketing lists - - including the Master File / Selects, proprietary models,

and TransLink / reverse append products - - is the same information that credit grantors, such as

Wachovia Bank Card Services, Inc. (“Wachovia”), First Card First Chicago NBD (“First Card”),

the Northern Trust Company (“Northern Trust”), Discover Card Brand, Novus Services, Inc.

(“Discover”), and Chase Manhattan Bank (“Chase Manhattan”), use in credit eligibility

determinations. Moreover, the record shows that Trans Union expected its credit grantor

customers to use the information as factors in such determinations.

2. Master File / Selects

Target marketers use Trans Union’s Master File / Selects to obtain a variety of

information about consumers. See discussion supra pp. 6-8. As detailed below, the record shows

that credit grantors use the same types of information as factors in credit granting decisions. The

record also demonstrates that, in many instances, Trans Union expected credit grantors to use

such information for credit granting decisions. Accordingly, the Master File / Selects product falls

under the FCRA’s definition of consumer report and Trans Union’s disclosure of it for target

marketing purposes violates the Act.
28

 Mr. Rapaport testified that he has seen scoring models that score the open date of

newest tradeline, open date of oldest tradeline, open date of newest finance loan, and open date of

newest auto loan. (Rapaport 772/9–774/10; see also Stormoen 3154, 3155/1-6, 3210/5-21).

29

 An open date is particularly significant in the mortgage context because it enables

target marketers to determine the date a mortgage was taken out and the interest rate. The

Mortgage Banc ordered a list of consumers with FHA mortgages opened between January 1994

and October 1995 with initial loan values between $75,000-$99,999 and $100,000-$150,000. 

(CX-17-A-B). 

19

a. Credit Limits

Trans Union does not contest the fact that information about a consumer’s credit payment

history, balance, and credit limit, is used by credit grantors in credit eligibility decisions; is

covered by the definition of consumer report; and cannot be disclosed in target marketing. 

Indeed, the record confirms that credit limits, like payment history and balance, are pieces of

information commonly used in credit scoring models. (Coffman 3848/16–3850/8,

3882/7–3884/4). 

Trans Union instead argues that its target marketing lists did not provide any information

about the credit limit on a consumer account. (TUPF at 189, 229). The record contradicts this

statement. Evidence demonstrates that Trans Union did provide such information by selling lists

of consumers who hold a premium bank card, which, as Trans Union expressly informed its target

marketing customers, is defined as having a credit limit of over $9,999. (CX-64-A; Dexter

1271/17-20; Weith 1867/5-13). Accordingly, we find that where Trans Union has disclosed

credit limit information to target marketers, it violated the FCRA by disclosing a “consumer

report” without a “permissible purpose.” 

b. Open Dates of Loans

Until October 1997, Trans Union routinely provided its target marketing customers with 

information, obtained from CRONUS, about the open date of loans. (Cabigon

1377/10–1378/11). The record sufficiently documents that the open date of a loan is a piece of

information regularly used by credit grantors. How long credit has been established and how

recently a consumer has pursued such credit are each strong predictors of future risk. (Rapaport

774/6-19, 793/22--794/12). “[M]ost recent date opened indicates a pursuit of new credit, which

is one of the types of characteristics that are indicative of future credit risk.” (Rapaport 792/12-

15, see also 774/6-19, 793/22--794/12). It is, therefore, not surprising that scoring models look

to the open date of tradelines to determine how long the consumer has had credit generally, and

how long the consumer has had particular types of credit. (Coffman 3847/12-24, 3876/14--

3877/20).28 Importantly, Trans Union’s own EMPIRICA and Uniquote models include the open

date of loans among their predictive characteristics of credit risk. (CX-93-P; CX-93-Z-4).29 
30

 Chase Manhattan’s prescreen criteria require that credit eligible consumers have at

least three lines of credit; its analysis of existing account holders showed that consumers with

fewer than three tradelines had a higher incidence of failing to repay their accounts. (CX-280-L;

Zancola 736/10-23). 

31

 Although Trans Union argued in the first proceeding before the Commission that

the number of tradelines is not information that credit grantors use in establishing a consumer’s

eligibility for credit, Trans Union appears to have changed its position. Trans Union now argues

that credit scoring models treat the characteristic “number of tradelines” (but not the “existence of

a tradeline”) as a predictive characteristic. TUAB at 16, 33--34.

20

Because this evidence clearly demonstrates that credit grantors use open date information

to make credit eligibility decisions, we find that the FCRA’s definition of consumer report covers

information on the open date of loans and that Trans Union violated the FCRA by disclosing such

information in its target marketing lists. 

c. Number of Tradelines

The record further shows that the number of tradelines in a consumer’s credit file is also a

predictive characteristic in [redacted] scoring models. (CX-93). Lenders like Chase Manhattan

also use a “number of tradelines” criterion in evaluating whether to grant credit.30 We therefore

conclude that credit grantors use such information in credit eligibility determinations.

Trans Union concedes that lenders use the number of tradelines as a factor in credit

granting decisions.31 It argues, however, that it does not disclose such information in its target

marketing lists. Trans Union instead claims that it merely discloses the existence of a tradeline

and the existence of particular types of tradelines. TUAB at 50. We find that the record shows

otherwise. 

In many cases, Trans Union does reveal the number of tradelines a consumer has by

permitting its target marketing customers to order, for example, lists of people who have a bank

card and a retail card and an auto loan - - in other words, three tradelines, the minimum

requirement in Chase Manhattan’s prescreen. In addition, the record shows that even the “mere”

existence of a tradeline counts as a meaningful number (i.e., one) in credit scoring. See infra p.

25. Trans Union, therefore, violated the FCRA by disclosing in its target marketing lists

information concerning an individual’s number of tradelines.

d. Type of Tradeline

Based on our review of the factors that credit grantors use in credit scoring and

prescreening, we also find that type of tradeline information is itself a factor in credit eligibility

decisions, regardless of performance on that tradeline. Consequently, this category of

information also constitutes a consumer report. Type of tradeline information is particularly
32

 Section 701(d) of the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. §

1691(d), requires that when lenders deny credit applications, they must provide reasons for the

denial. Credit scoring models generate descriptions of reasons why an applicant’s score deviates

from an optimal score which can be used by lenders to comply with ECOA obligations. One of

EMPIRICA’s reasons for denial is “lack of bank cards.” (CX-87; Rapaport 851/23--853/6).

33

 Trans Union has crafted a novel, but unsupportable argument that the only reason

Wachovia “scored” a bank card reference was not as a factor relevant to establishing credit

eligibility, but to establish whether the applicant was willing to list the presence of a bank card on

his or her application - - a test of character if you will or, as described by Complaint Counsel, a

lie-detector test. We agree with Complaint Counsel that this interpretation is not supported

anywhere in the record, even though Trans Union had the opportunity to question Wachovia’s

witness about it. 

21

important in this case because it constitutes the lion’s share of Trans Union’s target marketing

business. This fact is demonstrated by the list of selects that Trans Union offers and sells to its

customers. (CX-1; CX-342). As noted, Trans Union offers and sells target marketing lists that

provide the names of consumers who have a bank card or a mortgage or an auto loan, among

other type-specific credit relationships. See supra pp. 7-8.

Evidence in the record also indicates that type of tradeline information is used as one of

possibly a dozen predictors of future risk in credit scoring. For example, the existence of a bank

card is given weight in Trans Union’s own Uniquote and Horizon scoring models and other

scoring models. (Rapaport 785/4--786/7; Coffman 3869/16--3870/9).32 One of Wachovia’s

scorecards also assigns points for the presence of a bank card. (CX 275-R; Pendleton 400/22--

401/4).33 The existence of a finance company tradeline is also scored in Trans Union’s

EMPIRICA and Horizon models. (CX-93-H; Rapaport 789/15--790/15). According to Mr.

Rapaport, this factor is scored because pursuit of new credit, particularly with a finance company,

tends to be more indicative of future credit risk. (Rapaport 792/17--793/21). For example,

finance company users are people who have had credit problems in the past, and quite likely, have

had a bankruptcy. (Scott 2855/23--2856/7). The existence of one mortgage tradeline, again

without regard to performance on that account, also is used as a predictive attribute in credit

scoring. (Coffman 3862/9--3864/5). In Discover’s scoring model, for example, an applicant

receives points for an open mortgage tradeline, regardless of the payment status of that mortgage. 

(Stormoen 3153/8--3154/2, 3204/5-17). Discover also assigns points for the existence of a retail

tradeline and a bank card. (Stormoen 3150/16--3151/3). Indeed, Mr. Rapaport testified that he

has seen as predictive characteristics in scoring models many of the types of tradelines disclosed

by Trans Union’s target marketing lists, including the existence of a bank card, retail account,

finance loan, auto loan, and mortgage loan. (Rapaport 772/24--774/19).

Trans Union argues that credit scoring does not take into account particular types of

tradelines but instead the number of types of tradelines. TUAB at 46--50. The record, however,

shows that this claim is not true. In fact, Trans Union’s own credit models score those who have 
34

 Trans Union also claims that the ALJ improperly ignored the testimony of Mr.

Connelly who stated that the credit risk model requires all information on all tradelines to run - -

and that it could not operate using only the information from the Master File. TUAB at 33. This

argument also misses the point. The Commission is not finding, and need not find, that the

information in the Master File is all a credit grantor needs to make a credit decision. We are

simply required to determine what information is used or expected to be used, in whole or in part,

by credit grantors as a factor in determining a consumer’s eligibility for credit. See Section

603(d) of the FCRA. 

22

[redacted] differently from those who have [redacted]; and they score consumers who have a

[redacted] differently from those who have a [redacted]. (CX-93; Rapaport 785/4--786/15,

789/15--790/15). Furthermore, the testimony of Mr. Rapaport and other witnesses, as well as the

documentary evidence, confirms that the existence of “mere” types of tradelines - - e.g., a bank

card, a finance tradeline or a mortgage tradeline - - without regard to performance on those

accounts, conveys to credit grantors useful information about an individual’s creditworthiness. 

Also, such information is in fact used in the credit scoring systems credit grantors employ.34 

The importance of type of tradeline as a factor in credit eligibility is further illustrated in

the context of prescreening. One Wachovia prescreening model considers the existence of a bank

card so significant that it sets a lower minimum credit score for persons with a bank card as

compared to those without. (CX-275-I,J; Pendleton 396/2-13). Wachovia explained that

“individuals who do not have any bank card experience are significantly riskier.” (Pendleton

395/17--396/1). First Card finds the existence of a finance tradeline so significant that it excludes

from one of its prescreen offers consumers with a small finance company tradeline. (CX-278-B;

Koppin 517/9-14). Similarly, Northern Trust’s 1996 home equity prescreen offer rejected files

without at least one open mortgage. (CX-283-A). Chase Manhattan’s prescreen requires at

least two qualifying tradelines, one of which cannot be a refinanced loan or student loan. (CX280-O; Zancola 712/20--713/3).

To rebut the significance of type of tradeline in the prescreening context, Trans Union

argues, based on the testimony of Ms. Judy Pendleton of Wachovia, that the ALJ failed to

understand how prescreening works and overestimated the importance of type of tradeline in

prescreen criteria. TUAB at 55-57. According to Trans Union, prescreening models first apply

“exclusionary” factors, eliminating consumers whose credit files show, among other things,

certain derogatory credit information. In Trans Union’s view, when Wachovia looks to see if a

consumer has a bank card, it is actually looking to see if the consumer has a near perfect bank

card. (Pendleton 439--441). Here again, however, the record does not support Trans Union’s

claim.

First Card’s prescreening model rejects a consumer with a small finance company

tradeline, even a tradeline that has met “good performance” criteria. (CX-278-B). Similarly,

Chase Manhattan’s prescreen would reject a consumer whose only credit account is a student loan
35

 Trans Union also argues, based on the testimony of First Card’s Mr. Koppin and

Discover’s Mr. Stormoen, that the existence of a type of tradeline is not relevant to determining

credit eligibility; rather, it is performance information found in that tradeline that counts. TUAB

13-14. (Koppin 547–548; Stormoen 3180/6-24). Notwithstanding the selected statements of

Mr. Koppin and Mr. Stormoen, the weight of the evidence indicates that the existence of a type of

tradeline is used as a factor in determining credit eligibility. The portion of Mr. Stormoen’s

testimony that Trans Union highlights is belied by the remainder of his testimony describing

predictive characteristics that have nothing to do with credit performance, such as number of

retail and bank card tradelines, existence of a mortgage, age of oldest tradeline, and even

existence of a tradeline. (Stormoen 3150/3--3151/3, 3153/8--3154/2, 3204/5-17, 3155/11--

3156/4). Similarly, Mr. Koppin’s testimony must be viewed against First Card’s documentary

evidence, described above, that requires the rejection of consumers who have a small company

finance tradeline, even if they meet the other good performance criteria of no derogatory or

adverse file flags, no trades currently 30 days past due, no trades historically 90 days past due,

among others. (CX-278-B).

23

or a refinanced loan, even if such a tradeline passed the “good performance” test. (CX-280-Z34). Even in the Wachovia example, for a consumer that passes through a gauntlet of

exclusionary criteria, the presence or absence of a bank card may determine the range of

acceptable credit scores for a consumer to receive credit. (CX-275-I, J; Pendleton 396/2-13). 

These examples demonstrate that, even when all relevant consumer tradelines pass the

exclusionary criteria, credit grantors value specific types of tradelines differently - - e.g., a bank

card tradeline is generally more highly valued than a finance tradeline. This is confirmed by Ms.

Pendleton’s testimony about the risk associated with individuals who do not have any bank card

experience, and Mr. Rapaport’s and Mr. Scott’s testimony that people with a finance tradeline are

riskier and are likely to have had a bankruptcy. (Pendleton 395/17--396/1; Scott 2855/23--

2856/7; Rapaport 792/17--793/21). In addition, Trans Union’s argument that each individual

criterion for a prescreen must be examined against other criteria that impose additional

requirements simply fails to address the plain language of the FCRA’s Section 603(d) definition of

a consumer report - - information that is used “in whole or in part” in credit eligibility

determinations.35 

Finally, Trans Union’s own promotions clearly indicate that it “expected,” within the

meaning of the FCRA Section 603(d), type of tradeline information to be used in credit granting

decisions. Indeed, it boasted, “since credit has been established [for individuals on the student

loan list], one could argue that this list would have higher pass rates through the credit bureaus.” 

(CX-136). According to Trans Union, the premium bank card target marketing list identifies

individuals “who have been approved for this high amount of credit in the past.” (CX-64-A). 

 In light of these facts, the Commission finds that a type of tradeline, even without regard

to performance on that account, is valuable information used by credit grantors to decide whether
36

 The exception is the lists of consumers Trans Union disclosed or discloses through

its TransLink, New Issues and Emerging Consumer products. These names come directly from

CRONUS rather than the Master File and thus do not necessarily meet all the elements of the

Minimum Criteria. See discussion supra p. 10. Every consumer identified through these products

does, however, have at least one tradeline, the existence of which bears on credit eligibility and is

used in credit decisions. Specifically, Trans Link / Reverse Append discloses the names and

addresses of consumers with a bank card (and in some instances age and other data) and the New

Issues File and Emerging Consumers File disclose (or disclosed) consumers with open credit

tradelines. Id. Accordingly, the lists Trans Union sells through these products constitute

consumer reports.

24

to extend credit. Therefore, because this information is both used and expected to be used in

credit granting decisions, such information is covered by the FCRA’s definition of consumer

report, and Trans Union’s disclosure of type of tradeline information to target marketers violates

the Act. 

e. Existence of a Tradeline

As discussed, the court of appeals remanded this case so that the Commission could

determine whether there was sufficient evidence to show that the mere “existence of a tradeline”

is information used, expected to be used, or collected for the purpose of establishing an

individual’s eligibility for credit. Trans Union, 81 F.3d at 233. The consumer names and

addresses that Trans Union sells in its target marketing lists have met the Minimum Criteria, 36

including that his or her CRONUS (i.e. “credit”) file has at least one tradeline or, for lists

generated prior to January 1998, at least two tradelines. See discussion supra p. 6. 

The record in this case, however, shows that Trans Union’s customers do not purchase

only the names and addresses of consumers with a tradeline meeting the Minimum Criteria. 

Instead, they purchase the names and addresses of individuals who also meet other criteria, e.g.,

consumers who also have an upscale retail card and an auto loan. Indeed, Trans Union’s

promotional materials recognize that customers do not simply request the Master File list and the

materials encourage them to narrow down that list based on additional criteria that meet their

needs. 

You’ll find . . . in our Master File . . . over 140 million consumers. Of course, you won’t

want to reach all of them. That’s why each consumer record includes more than 350

variables that allow you to segment, select, target, and sell with unmatched precision. 

(CX-79-B). In other words, Trans Union does not sell lists of people who just have one

tradeline. Instead, Trans Union sells lists of people with a tradeline who meet other specified

criteria. 

Nonetheless, because the Minimum Criteria apply to virtually all of Trans Union target
37

 When a loan applicant does not have a tradeline, Trans Union’s EMPIRICA model

cannot calculate a score and returns a message “EMPIRICA Not Scored – Insufficient Credit.”

(Rapaport 764/12-15; CX-87-A). In fact, most credit grantors will not approve an applicant

where there is no score due to the absence of a tradeline, although some will build custom

scorecards for those who have no tradeline. (Rapaport 766/1-19). Discover Card, for instance,

declines credit applicants whose credit reports indicate no tradeline. (Stormoen

3155/24–3156/4).

38

 One of Wachovia’s prescreens requires one open tradeline for two years; another

Wachovia prescreen requires at least one open tradeline for one year. (CX-275-C, F; CX-276-A,

C; Pendleton 393/3-23, 414/17--415/21). In addition, First Card’s prescreening criteria also

reject consumers with no tradeline, although First Card extends credit to consumers without

tradelines under special circumstances. (CX-278-A; Koppin 515/17-24, 516/12-20, 526/9-

25

marketing lists, we make the following determinations based on our review of the record. First,

the Minimum Criteria for appearing on Trans Union’s base marketing lists are not the “mere

existence of tradeline.” Rather, the Minimum Criteria also reveal, among other things, the

existence of a recently active and current credit relationship. Specifically, the prerequisite for

appearing on a list is: (1) the existence of either two tradelines active within the last six months or

one tradeline active within the last six months with an address matched to an outside vendor file,

and (2) that the tradeline must have no closed date, must not be disputed, and cannot be a

collection tradeline or a public record tradeline.

Second, the record shows that even these Minimum Criteria are more important than they

initially appear. Interestingly, Trans Union’s Minimum Criteria are substantially similar to FICO’s

minimum criteria for every credit scoring model that the three national CRAs use. Like the names

in the Master File, for example, FICO requires initially that a consumer have at least one open line

of credit updated within six months that is not the subject of a dispute and that gives no indication

that the subject is deceased. (Rapaport 763/4-23; CX-89-S; Wiermanski 1795/21--1796/20).37

The importance of the existence of a tradeline is further revealed through the scorecard

segmentation process - - a mechanism for grouping like people together to better determine future

risk. See supra n.24. Significantly, Mr. Rapaport testified that each of the three national credit

reporting agencies uses scorecard segmentation and that they each have a scorecard for

consumers who have only one tradeline; consumers who have either zero or two or more

tradelines are evaluated through different scorecards. (Rapaport 770/15--771/5).

Prescreening criteria similarly illustrate the significance to credit grantors of having a

tradeline. The Chase Manhattan prescreen criteria require that a person have at least one tradeline

verified within the last six months. (CX-280-L; Zancola 723/3-6). Similarly, in the Wachovia

prescreen, the first factor applied to a consumer’s credit file, without reference to any

performance information, is whether the consumer has a line of credit which has been open for a

specified duration. (Pendleton 393/3-23; CX-275-F; CX-276-A).38
528/4). Also, Northern Trust’s 1993 and 1996 home equity prescreens look to tradeline activity

within the last year. (CX-281-A; CX-283-A; McCoy 603/9-25, 611/8-12).

39

 Trans Union argues that Complaint Counsel “essentially” concedes that

information disclosed in its proprietary target marketing models and its reverse append product is

not a consumer report. TURB at 1. We find to the contrary. Complaint Counsel’s brief

expressly states that the modeled products “are not only derived from and disclose credit

eligibility factors (IDF-82, 85, 92, 108), they are specifically marketed by Trans Union for both

target marketing and credit eligibility uses (IDF-87, 89, 93-94).” CCAB at 88, n.124. 

Complaint Counsel’s brief also discusses the privacy-intrusive aspects of reverse append and

Trans Union’s use of the product without a permissible purpose. Id. at 10. 

40

 Trans Union objects that the ALJ “leaped” without analysis to the conclusion that

its proprietary models are “consumer reports,” arguing that the ALJ made no finding about

whether the models were used or expected to be used as factors in establishing credit eligibility. 

TUAB at 3--4. We agree that such additional findings must be made before Trans Union can be

held responsible for FCRA violations, and based on the record now before us, we make such

findings here. 

26

Further, the record demonstrates that Trans Union “expected,” within the meaning of the

FCRA, that information regarding the existence of a tradeline (or two tradelines) would be used in

credit eligibility decisions. Trans Union promoted: “Any adult with at least two active tradelines

of credit is represented on the Masterfile.” (CX-33-A; CX-69-A). “Any individual with at least

two lines of credit is included in the [Master File’s]140 million plus names and addresses.” (CX61-A). Trans Union’s lists are “not just ordinary lists but lists of people who are active users of

credit.” Trans Union, 118 F.T.C. at 845. 

These record examples establish that the information Trans Union routinely discloses

through its Master File / Selects product is used and/or expected to be used by credit grantors in

eligibility decisions. Therefore, the target marketing lists created from this product are consumer

reports and Trans Union violates the FCRA by disclosing them to target marketers without a

permissible purpose.

3. Proprietary Models39

The lists Trans Union generated through its proprietary models -- E-Val, TIE, SOLO,

P$YCLE, and PIC -- similarly convey information that is used or expected to be used in credit

eligibility determinations and Trans Union’s disclosure of them to target marketers similarly

violated the FCRA.40 
41

 Trans Union openly characterized its “Standard Characteristics,” upon which all of

its five proprietary models were based, as “correlat[ing] highly with lending activity.” (CX-263-

A).

42

 A product brochure for TIE states that customers can use TIE “with confidence”

to “[f]ine tune credit limits and loan conditions on credit applications . . . ‘[r]ed flag’ applicants

whose low income estimate may indicate the need for additional verification,”and “[f]lag

accounts to increase/decrease lines of credit.” (CX-120-B, C). 

43

 Trans Union argues that the ALJ’s finding that it “‘uses TIE in credit granting’ (F

93)” is not supported by the record and that the record shows it merely “contemplates” using TIE

in credit granting. TUAB at 4. Trans Union’s characterization of the record is correct. Still,

Trans Union’s “contemplation” (the actual term used was “envisioning”) of TIE for use in credit

approve/decline decisions demonstrates that Trans Union expected information in TIE to be used

in credit eligibility decisions. Because Section 603(d) of the FCRA covers such expected use,

information in TIE is a consumer report.

27

Trans Union’s promotion of each of these products41 reveals its expectation that they

would be used as factors in establishing credit eligibility. Trans Union marketed its E-Val product

-- its scoring system that estimates the amount of equity available in a consumer’s home -- to

lenders as: 

the ideal tool for marketers of home equity lines of credit or other

secured loans. It clearly identifies homeowners who have both

equity available and an interest in securing credit. . . E-VAL can be

of significant value to a wide range of marketers: Banks, Credit

Unions, Brokerages, Mortgage Brokers, Mortgage Guarantors,

Fannie Mae/Ginnie Mae Agencies, Ad Agencies, Modelers, [and]

Catalogers. 

(CX-118). The record also shows that Trans Union’s lender/customers requested E-Val home

values on individuals in deciding whether to make loan offers. (CX-23; CX-24; CX-38). 

In its seller’s guide, Trans Union describes the following uses for its income estimator

model (“TIE”): “in credit risk scoring for new or existing accounts . . . in existing prescreen

criteria . . . as a supplement to credit application data . . . to set initial credit limits.” (CX-119). 

The guide also states that “[t]he most prominent markets for TIE are: credit grantors (including

bank card issuers, finance companies, retailers, and auto finance companies) and other lenders

(retail banks, savings & loans, and credit unions).” Id.

42 Further, Trans Union’s Vice President

Chester Wiermanski testified that TIE was intended for use in approve/decline decisions. 

(Wiermanski 1719/25--1720/20).43 Clearly, Trans Union expected lenders to use information in

TIE in credit granting decisions and knew that they did, in fact, use such information in these

decisions. 
44

 Trans Union’s promotions also disclose in general terms what inputs it uses to

generate its model results. For E-Val, Trans Union announced, “Open mortgage dates, initial

mortgage amount, presence of additional mortgages - - [w]ith this information, we can create

reliable estimates of the length of residence and the actual equity ratio and equity amount available

to homeowners. By deducting existing mortgage balances from the estimated home value, and

applying an adjustment factor of 75%, you now possess invaluable data on 62 million U.S.

homeowners.” (CX-118-B). For SOLO, Trans Union stated: “[G]roups individual consumers

with similar lifestyle, spending and payment behaviors into clusters.” (CX-114-B). For

28

Trans Union’s internal seller’s guide for SOLO also notes that “SOLO is most often used

by credit grantors for non-preapproved offers, such as home equity offers or secured card offers.” 

(CX-115-O). It also discusses using SOLO in preapproved offers of credit. (CX-115-Z-2).

Trans Union, therefore, expected this product also to be used as a factor in credit granting, and

conceded this point when it stated in oral argument that its target marketing customers were using

SOLO in credit eligibility decisions. (Oral Arg. Tr. 100/10-13; Davis 67/19--68/4).

The “P$YCLE” model uses CRONUS data to estimate a consumer’s income producing

assets. Trans Union’s promotional brochure for P$YCLE states: 

P$YCLE allows marketers to segment consumers according to

affluence, financial product and service usage, and account balances

. . . P$YCLE, designed for financial service companies. 

(TU-56).

Similarly, PIC, Trans Union’s model that predicts the likelihood that an individual owns

financial service products, is promoted as follows: 

It’s easier to acquire individuals’ money if you know where they

keep it . . . Imagine the benefit of knowing which financial vehicles

an individual investor will choose. That’s exactly what PIC

(Prospect Identification and Classification) offers to marketers of

mutual funds, money market accounts, insurance, annuities and

home equity credit lines . . . Tap into the richest source of

individual-level financial data in America . . . a new, higher level of

predictive behavior . . . and a profitable way for your company to

acquire new business . . .. (emphasis added) 

(TU-20).

All of this evidence plainly shows that Trans Union fully expected lenders to use

information in Trans Union’s proprietary models to find the most eligible and profitable targets for

the lenders’ promotions.44 In addition, each of the models provides information about the
P$YCLE, “The P$YCLE model draws on the five economic and demographic factors that have

the greatest effect on consumers’ financial behavior: income producing assets, total household

income, age of household head, home ownership, urbanization.” (TU-56). With TIE, the sellers

guide tells Trans Union’s salespeople that the model uses 23 key characteristics that predict

income - - “age and type of accounts, amount of available credit, amount of credit used, number

and type of new accounts.” (CX-119-I).

45

 This is significant because we find that age data meets the FCRA’s definition of a

consumer report. See discussion infra pp. 30-31.

29

consumer’s income - - a significant factor “used” in credit eligibility decisions. For E-Val and

SOLO in particular, the record shows that lenders used the model scores or categories to make

such decisions.

Consequently, we find that Trans Union’s proprietary models were “used or expected to

be used” in credit eligibility decisions, and thus constitute consumer reports within Section 603(d)

of the FCRA. By disclosing these reports to target marketers which do not have a permissible

purpose under the Act, Trans Union has violated the FCRA.

4. TransLink - - the Reverse Append Product

TransLink is a special service through which Trans Union provides its merchant customers

with names and addresses of the people who have used their bank cards to make purchases from a

particular merchant. TransLink differs from Trans Union’s other products because the merchant

already has access to some of the information contained in the reverse append list, i.e., the name

of a purchaser and the account number based on the customer bank card transaction record. 

Trans Union does, however, communicate a variety of information that the merchant does not

already have. Specifically, by matching the merchant’s consumer information with the

information in CRONUS, Trans Union confirms the accuracy of the merchant’s data at the time it

generates the list. Moreover, Trans Union communicates the consumer’s address - - a valuable

asset - - and, as previously noted (see supra p. 10), can also append age data45 to its reverse

append lists. 

Despite the fact that the merchant purchasing a reverse append list already has a name and

account number, the FCRA analysis for TransLink is the same as for Trans Union’s other

products. This analysis requires us to determine whether the information Trans Union sells

through reverse append is a consumer report and whether the recipient of the information has a

permissible purpose under the Act. Trans Union accesses its consumer reporting database to

obtain, match and disclose names and addresses of consumers with a certain type of credit card, in

this case an active bank card. The matching of a bank card number with a consumer’s name and

address, and the communication of that matched information to a merchant constitutes a

consumer report under the Act. As discussed above, such type of tradeline information is used, or

expected to be used, in determining credit eligibility. Accordingly, reverse append lists are
46

 See supra n.2 and p. 14. Although the court of appeals viewed this part of the

definition as “not very demanding,” it did so in the context of examining the impact of the

existence of two tradelines. Trans Union, 81 F.3d at 231. This part of the definition is not as

easily met for other information considered in credit decisions. 

47

 See discussion infra pp. 37-39.

48

 See also supra n.21.

49

 Mr. Rapaport testified that zip codes are not used in credit bureau scoring. 

(Rapaport 847/17-21). Mr. Koppin stated that zip codes are used in extracts to narrow the

geographic area of First Card’s prescreen list but zip codes are not used as a credit criterion. 

(Koppin 582/1-16, 583/25--584/18). 

30

consumer reports and, because target marketing is not a permissible purpose under the Act, Trans

Union cannot disclose these lists to its target marketing customers.

C. Analysis of Demographic Information

Section 603(d)’s definition of a consumer report requires not only that the information be

“used” or “expected to be used” in a credit decision, but also that the information bear on a

consumer’s “credit worthiness, credit standing, credit capacity, character, general reputation,

personal characteristics, or mode of living.”

46

When viewed against the FCRA’s statutory purpose of protecting the privacy of personal

credit information,47 we find that the “bearing on” limitation, set forth in Section 603(d) excludes

from the FCRA’s definition of consumer report certain predominantly identifying information

including: name, mother’s maiden name, generational designator, telephone number, and social

security number. Although the record shows that certain lenders exclude from prescreening offers

consumers who have a generational designator (e.g., “Jr.,” “Sr.,” etc.), or do not have a social

security number, they do so only based on concern about identity, i.e., accessing the file of the

correct individual. This information does not, however, bear on creditworthiness, credit capacity,

credit standing, character, general reputation, personal characteristics, or mode of living, unless

such terms are given an impermissibly broad meaning.48

The treatment of two other categories of demographic information - - (1) address and 

(2) age - - also merits additional analysis. With respect to the address of an individual, the court

of appeals noted the ease with which zip codes, a component of an address, could be used in

lending decisions to ensure that only the wealthy - - for example people living in the Beverly Hills,

California zip code 90210 - - would be eligible for loans. Trans Union, 81 F.3d at 232. 

Regardless of whether this information might bear on credit worthiness, nothing in the record

before us establishes that zip codes are actually used, or expected to be used as a credit eligibility

factor in scoring or as a credit criterion in prescreening.49 Absent such evidence, the FCRA does
50

 Although some lenders will not extend credit to consumers with a P.O. Box

address, we do not find that the P.O. Box feature bears on “credit worthiness, credit standing,

credit capacity, character, general reputation, personal characteristics or mode of living.”

51

 We recognize that the Equal Credit Opportunity Act generally prohibits credit

decisions based on age. 15 U.S.C. § 1691(a). There are exceptions, however: a lender can favor

applicants who are age 62 or older. A lender also can consider age if it bears on other elements of

creditworthiness. For example, a lender can consider whether an applicant is close to retirement

age, which could impact future income. Section 202.6 of Regulation B (the implementing

regulation of the ECOA), 12 C.F.R. § 202.6. 

31

not prohibit Trans Union’s disclosure of simple address information to target marketers.50

On the other hand, the record shows that an individual’s age does bear on their credit

capacity and is used in credit granting decisions. Witnesses from both Northern Trust and Chase

Manhattan testified that their companies do not offer credit to consumers who are younger than

the legal age. (McCoy 631/19-24; Zancola 711/9-16). In addition, Discover Card looks at

“longevity” of “economic dealings people have,” which may be determined by a consumer’s age. 

(Stormoen 3190/20-- 3191/7). Mr. Rapaport also testified that some scorecards use age as a

factor. (Rapaport 847/8-16). The record, therefore, demonstrates that lenders use age

information as a factor in credit granting decisions.51 Further, age clearly bears on credit capacity

where state laws restrict contracting with minors. Therefore, age information falls within the

definition of a consumer report and its disclosure by a CRA to target marketers violates the

FCRA.

D. Trans Union’s Remaining FCRA Arguments

Trans Union contends that the ALJ’s decision is unsupportable because the ALJ ignored

the expert testimony of Dr. John Coffman, Mr. Kenneth Scott, and Mr. Barry Connelly, each of

whom testified that the existence of a tradeline does not factor into credit eligibility decisions. 

TUAB at 31-33. Although Trans Union called these witnesses as expert witnesses, it is not clear

that the ALJ found them qualified as “experts.” Indeed, the ALJ stated that two of the purported

experts were “not credible on this issue” and found that Dr. Coffman showed bias through his

inconsistent testimony and that Mr. Scott had no relevant experience to support his testimony. 

IDF at 86, n.183. We agree with the ALJ.

The record indicates that Dr. Coffman made internally inconsistent statements on direct

and cross examination. Dr. Coffman stated on direct that none of the information sold by Trans

Union was used as a factor in determining credit eligibility, with the exception of P.O. Box

information, which was used to exclude certain consumers from prescreened offers of credit. 

(Coffman 3840/5-21). On cross examination, however, Dr. Coffman admitted that information

on the existence and number of mortgages, auto loans, and open bank cards has been used as a

predictive attribute in some scoring models. (Coffman 3862/5--3863/22, 3868/16--3870/9).
52

 In addition, Trans Union’s CEO and a Senior Vice President sit on ACB’s Board

of Directors and thereby control Mr. Connelly’s budget as well as his salary. (Connelly

2570/20–2571/8, 2572/5-11). 

53

 Trans Union’s remaining arguments are, at best, splitting hairs as they have little

impact on the core of Trans Union’s practices and, thus, our analysis. For example, when

Complaint Counsel showed that Wachovia’s PCL prescreen requires at least one tradeline open

for a year, Trans Union argues that such tradeline must also have a balance update, not just an

open date. TURB at 18. In addition, responding to Complaint Counsel’s showing that First

Card’s prescreen rejects any file showing a finance tradeline, Trans Union points out that the

precise criteria are “‘small company finance trade[line] with a current balance of $1.00 or more,

excluding student loans.’” TURB at 19. The inquiry at issue, however, is whether the

information disclosed by Trans Union, including the existence of a credit account and specific

types of credit accounts, are used, in whole or in part, as factors in credit eligibility

determinations. The more detailed description by Trans Union of Wachovia and First Card’s

prescreen criteria support the same answer of “yes.” 

32

We agree with the ALJ’s finding that Mr. Scott’s experience was not sufficient to support

giving particular weight to his testimony. Mr. Scott’s experience was in marketing credit cards

and not in making credit eligibility decisions. While Trans Union argued that Mr. Scott testified

extensively regarding his experience in credit eligibility, it offered no evidence to support this

assertion. TUAB at 22, 33. We find that Mr. Scott’s testimony, viewed in the best light for

Trans Union, supports only that he attended meetings at American Express where credit eligibility

criteria were discussed. (Scott 2616/22--2617/16). This fact only demonstrates that he had

indirect knowledge of the subject matter. We thus find that the testimony of credit grantor

witnesses, with far more intimate knowledge of the complex array of factors that influence credit

eligibility decisions, substantially outweighs Mr. Scott’s testimony.

As President of Associated Credit Bureaus (“ACB”), the primary trade association for

credit bureaus, Mr. Connelly serves the interests of ACB’s members and Trans Union is one of

the three main dues paying members. (Connelly 2565/4-12, 2566/4-11).52 Although the ALJ did

not specifically comment on Mr. Connelly’s testimony, we have throughly considered it and

determined that it is also entitled to little weight. Further, Mr. Connelly testified that he had no

experience as a credit grantor or credit scorer and that he did not know how Trans Union’s credit

scoring model worked. (Connelly 2560/11--2561/18, 2601/20--2602/1).

Trans Union further notes that Complaint Counsel produced no expert testimony showing

that the information disclosed in Trans Union lists is used by credit grantors in credit granting. 

Complaint Counsel did, however, provide sufficient factual evidence - - both contemporaneous

documentary evidence and non-expert testimony - - that Trans Union’s target marketing lists

disclose information used in credit granting decisions and constitute consumer reports that cannot

be disclosed for target marketing purposes.53 Hence, Complaint Counsel was not required to

present expert testimony to support the complaint allegations.
54

 We note here that our conclusions are consistent with the Commission’s

Statements of General Policy or Interpretations under the Fair Credit Reporting Act, 16 C.F.R.

Part 600, et seq., which offer general guidance on the FCRA and are not regulations and do not

have the force of statutory provisions. 16 C.F.R. § 600.2(a) Further, the Statements appear to be

of marginal relevance to the issues here, as neither the parties nor the ALJ based their arguments,

conclusions or findings on these Statements. 

33

E. Conclusion

Based on a thorough review of the record, including the testimony, we find that Trans

Union’s target marketing lists are indeed consumer reports under the FCRA because they contain

information that bears on the factors set forth in Section 603(d)(1) and is used or expected to be

used as a factor in determining a consumer’s eligibility for credit. By selling these lists to target

marketers without a permissible purpose, Trans Union violates the FCRA. This conclusion

applies to Trans Union’s Master File / Selects; proprietary models; and TransLink / reverse

append products. 

Trans Union’s disclosure to target marketers of information on the existence of a tradeline

violates the FCRA. Further, Trans Union’s disclosure in its target marketing products of other

information, such as the existence of a type of tradeline, open date of tradeline, home equity

information, and income estimations, among other list criteria described above, also violates the

Act. 

Finally, the record in this case supports, with one exception, the lawful disclosure of most

demographic information. The one exception, however, is age information which the record here

shows is used in credit decisions, bears on credit capacity, and is accordingly a consumer report

that cannot be disclosed in target marketing.54

VI. CONSTITUTIONAL ANALYSIS

Trans Union raises two constitutional defenses in this matter. Trans Union first asserts

that, by barring it from selling target marketing lists, the FCRA violates the First Amendment of

the United States Constitution. Second, Trans Union claims that the FCRA’s definition of

consumer report is unconstitutionally vague under the Fifth Amendment. We disagree with both

arguments.

A. The FCRA Is a Constitutionally Permissible Restriction on Speech

The First Amendment states that “Congress shall make no law . . . abridging the freedom

of speech . . . .” The right to free speech, however, is not unfettered and it is well settled that

different types of speech merit different levels of constitutional protection. Specifically, courts

apply the highest degree of protection to speech related to issues of public concern such as

political or social change or artistic or scientific expression. See, e.g., Dun & Bradstreet, Inc. v.
34

Greenmoss Builders, Inc., 472 U.S. 749, 758-59 (1985) (plurality opinion). Such fully protected

speech may be called “pure” speech. American Future Systems, Inc. v. Pennsylvania State Univ.,

752 F.2d 854, 861 (3rd Cir. 1984). By contrast, courts apply a reduced or intermediate level of

protection to “commercial” speech - - speech, such as advertising, that is related to a commercial

transaction. See, e.g., Central Hudson Gas & Electric Corp. v. Public Serv. Comm’n of New

York, 447 U.S. 557, 561-63 (1980). Courts have also recognized that the First Amendment does

not protect certain types of speech, such as obscenity and “fighting words,” Dun & Bradstreet,

472 U.S. at 758-59, n.5, or conduct that does not constitute speech, Michael Barnes, et al. v.

Glen Theatre, Inc., et al., 501 U.S. 560, 570 (1991). For the reasons discussed below, we find

that Trans Union’s consumer reports are entitled to intermediate First Amendment protection. 

Accordingly, we analyze the FCRA under the standard established by the Supreme Court in

Central Hudson and its progeny and conclude that the Act does not violate the First Amendment

by prohibiting Trans Union from selling consumer reports to target marketers.

1. Type of Speech 

In order to apply the appropriate First Amendment analysis to Trans Union’s challenge to

the FCRA, we must initially determine what type of expression or conduct the Act regulates in

this case. 

a. Pure Speech

Trans Union contends that its target marketing lists are pure speech and, as such, should

receive the highest degree of constitutional protection. TUAB at 67--68. We are not persuaded,

however, that Trans Union’s lists rise to the level of such fully protected pure speech. The

Supreme Court has held that speech on public issues deserves the highest degree of protection

because the First Amendment “‘was fashioned to assure the unfettered interchange of ideas for the

bringing about of political and social changes desired by the people.’” Dun & Bradstreet, 472

U.S. at 759, quoting Roth v. United States, 354 U.S. 476, 484 (1957). Speech related to matters

of purely private concern, however, merits less First Amendment protection because regulation of

such speech has less of an impact on the exchange of ideas on public issues. Id. 

Here, the record clearly establishes that Trans Union’s target marketing lists do not

concern the types of lofty or important public issues or themes traditionally recognized as central

to the First Amendment’s guarantee of freedom of expression. See, e.g., McIntyre v. Ohio

Elections Comm’n., 514 U.S. 334 (1995) (distribution of anonymous political campaign

literature); City of Ladue v. Gilleo, 512 U.S. 43 (1994) (display of sign opposing Persian Gulf

War); United States v. Eichman, 496 U.S. 310 (1990) (burning American flag); Hustler

Magazine, Inc. v. Falwell, 485 U.S. 46 (1988) (vulgar parody of public figure); New York Times

Co. v. Sullivan, 376 U.S. 254 (1964) (allegedly libelous newspaper editorial advertisement about

public official and civil rights movement); Kingsley International Pictures Corp. v. Regents of the

University of the State of New York, 360 U.S. 684 (1959) (exhibition of film depicting and

expressing approval of adultery). Rather, the lists concern private information about individual
55

 Of course, both Trans Union and Complaint Counsel also assert in the alternative

that the target marketing lists are commercial speech and that we should therefore apply

intermediate level scrutiny to the FCRA. We analyze commercial speech infra.

56

 See Dun & Bradstreet, Inc. v. Greenmoss Builders, 472 U.S. 749, 762 (1985)

(credit report “was speech solely in the individual interest of the speaker and its specific business

audience”); Millstone v. O’Hanlon Reports, Inc., 528 F.2d 829, 833 (8th Cir. 1976) (treating

consumer credit reports as commercial speech); U.D. Registry, Inc. v. State, 40 Cal.Rptr.2d 228,

233 (Cal. 1995) (much of the information contained in the credit reports is “highly protected

noncommercial speech”); Equifax v. Cohen, 420 A.2d 189 (Me. 1980) (rejecting appeal of lower

court determination that credit reports are commercial speech), cert. denied, 450 U.S. 916

(1981).

35

consumers’ credit history and other confidential, personal financial data. Because the lists do not

possess the type of public component that compels full First Amendment protection, we conclude

that Trans Union’s lists are not pure speech and, consequently, we do not apply the strict scrutiny

analysis to the FCRA’s restriction on the dissemination of these lists.

b. Nonspeech

We also reject Complaint Counsel’s position that the lists are not speech at all and thus fall

outside the scope of First Amendment protection. Complaint Counsel argues that Trans Union’s

lists are not expression but, rather, are simply “commercial products” that Trans Union sells to its

customers. CCAB at 58-61.55 Although Trans Union’s lists are products, we find that they do

possess a quality of speech because they communicate substantial consumer information to Trans

Union’s target marketer customers. In other words, the lists Trans Union sells to its clients are

more than simply a collection of names and addresses. Instead, these lists reflect Trans Union’s

complex analysis and qualitative judgment regarding which consumers meet various credit and

financial-related criteria. Moreover, although courts have accorded them varying levels of

protection, they have also treated consumer reports as speech.56 Indeed, by questioning the

application of the First Amendment here, the court of appeals in this case has necessarily assumed

that a consumer report is some form of speech. See Trans Union, 81 F.3d at 235. 

c. Commercial Speech

The ALJ held that Trans Union’s lists constitute commercial speech and, as such, applied

intermediate constitutional scrutiny to the FCRA. ID at 88-89. We find that, although the target

marketing lists do not possess all the elements typically associated with commercial speech, the

lists have sufficient commercial speech qualities (without rising to the level of fully protected pure

speech) to warrant intermediate First Amendment Protection. Our conclusion is supported by the

full record here as well as Supreme Court precedent.

The Supreme Court has defined the “core notion of commercial speech” as an expression
57

 Although Trans Union correctly notes that Dun & Bradstreet, unlike the instant

matter, concerned the distribution of a false credit report that injured the reputation of the

report’s subject, the falsity of the credit report was only one of the several considerations that led

the Court to conclude that its distribution was not entitled to full First Amendment protection. 

The fact that the consumer report was of limited distribution and, like advertising, was hardy and

unlikely to be deterred by incidental state regulation supported this conclusion. Id. at 762.

36

that does no more than propose a commercial transaction. Bolger v. Young Drug Products

Corp., 463 U.S. 60, 66 (1983) citing Virginia Pharmacy Bd. v. Virginia Consumer Council, 425

U.S. 748, 762 (1976). Recognizing that the line between commercial and other types of speech is

not always distinct, the Court expanded upon the concept by identifying three factors relevant to

the determination of whether speech is “commercial”: (1) whether the speech is an advertisement;

(2) whether it mentions a specific product by name; and (3) whether it is economically motivated. 

Bolger, 463 U.S. at 66-67. 

Trans Union’s lists do not fall neatly into this core notion of commercial speech as

articulated by the Court in Bolger. The lists are not advertisements but instead are antecedent to

advertisements - - i.e., the solicitations that Trans Union’s target marketing customers send to the

consumers identified in the target marketing lists. Trans Union’s lists also do not mention a

product by name; instead, as asserted by Complaint Counsel, they are the actual product. Finally,

although Trans Union’s marketing list business is certainly motivated by economic considerations,

that fact alone does not confer commercial speech status. See Bolger, 463 U.S. at 67 (fact that

party had an economic motivation for mailing pamphlets at issue was insufficient by itself to turn

materials into commercial speech).

Still, Bolger does not establish a bright line test for commercial speech and the Supreme

Court has also regarded “expression related solely to the economic interests of the speaker and its

audience” as commercial speech. Central Hudson, 447 U.S. at 561. Similarly, Trans Union

creates and sells its lists for its own economic benefit as well as the benefit of its target marketing

customers. In other words, while the ultimate consumers who are the subject of Trans Union’s

lists have an interest in protecting their credit and financial privacy, Trans Union’s sale of its

target marketing lists is a commercial transaction motivated by the economic interests of the list

seller and the list purchaser. 

Moreover, in Dun & Bradstreet, which concerned a consumer report containing false

information, a plurality of Justices found that the consumer report at issue deserved reduced First

Amendment protection. The plurality opinion explained that speech related strictly to private

concerns has less First Amendment value and merits less stringent protection than speech on

matters of public concern. Thus, the level of protection the Court should give to a consumer

report turned on whether the report concerned public or private matters. The plurality concluded

that, based upon an examination of the content, form and context of the report, it involved

“speech solely in the individual interest of the speaker and its specific business audience” and

deserved reduced First Amendment protection. Dun & Bradstreet, 472 U.S. at 762 (plurality).57
58

 Our conclusion is supported by a recent ruling of the U.S. Court of Appeals for the

Ninth Circuit in which the court held that a private party’s sale of the names and addresses of

arrestees was a “pure economic transaction” that constituted commercial speech entitled to

intermediate First Amendment protection. United Reporting Pub. Corp. v. California Highway

Patrol, 146 F.3d 1133 (9th Cir. 1998), rev’d on other grounds, Los Angeles Police Dept. v.

United Reporting Pub. Corp., 120 S. Ct. 483 (1999) (Court reversed facial invalidation of the

statute and did not reach the issue of whether the information constituted commercial speech); see

also Lanphere & Urbaniak v. State of Colorado, 21 F.3d 1508, 1513 (10th Cir. 1994) (state

statute restricting release, for commercial use, of criminal justice records containing personal

information was subject to intermediate First Amendment scrutiny).

59

 Because the precise nature of Trans Union’s lists was unclear, in an abundance of

caution, the Commission formerly applied both the commercial speech and fully protected pure

speech analysis when it first examined Trans Union’s target marketing lists. See In re: Trans

Union, 118 F.T.C. at 881-89. The Commission ruled that the FCRA did not violate the First

Amendment under either standard. Our review of this matter is de novo and, based on our

evaluation of a full record that was not previously before the Commission, we have determined

that Trans Union’s lists are not fully protected speech and thus we decline to apply strict

constitutional scrutiny to the FCRA.

37

Even though Trans Union’s lists do not embody all of the characteristics of core

commercial speech outlined by the Court in Bolger, the lists concern private matters primarily

concerning the economic interests of the speaker and its specific business audience. As such, we

find that the best fit here is to grant Trans Union’s lists the same degree of First Amendment

protection accorded to commercial speech.58 Consequently, we apply intermediate constitutional

scrutiny to the FCRA’s restriction of Trans Union’s sale of its target marketing lists.59

2. The FCRA Passes Intermediate Constitutional Scrutiny

The Central Hudson case and its progeny set forth the analysis appropriate for

intermediate level scrutiny in a First Amendment context. Under this test, a court must examine

the following: (1) whether the expression at issue concerns lawful activity and is not misleading;

(2) whether the asserted governmental interest supporting the restriction is substantial; (3)

whether the regulation directly and materially advances the governmental interest asserted; and

(4) whether the regulation is narrowly drawn to advance the government interest. Central

Hudson, 447 U.S. at 566. Because it is undisputed that the expression at issue here concerns

truthful, non-misleading factual information, we will focus our attention on the other three prongs

of the Central Hudson test.

a. The Government Has a Substantial Interest in Protecting

the Privacy of Consumers’ Personal Credit Information

The FCRA and its legislative history indicate that the government’s interest in restricting
60

 During his testimony at Congressional hearings on the bill that became the FCRA,

Professor Westin provided various examples of non-credit grantors easily obtaining consumer

credit files. These examples include Professor Westin’s own success in securing, without any

credit-related purpose, a co-worker’s consumer report as well as the ability of police agencies and

federal investigators to obtain and use consumer reports in connection with non-credit related

investigations. Fair Credit Reporting: Hearings on S. 823 Before the Subcomm. on Financial

Institutions of the Senate Comm. on Banking and Currency, 91st Cong. 73-97, pp. 92-93 (1969)

(testimony of Alan Westin).

61

 Statement of Senator Proxmire, Committee on Banking and Currency,

Subcommittee on Financial Institutions, S. REP. No. 91-517 (November 5, 1969). Further, “[a]

fourth problem is that the information in a person’s credit file is not always kept strictly

confidential.” S. REP. No. 91-517, at 4 (1969). 

62

 Fair Credit Reporting: Hearings on S. 823 Before the Subcomm. on Financial

Institutions of the Senate Comm. on Banking and Currency, 91st Cong. 2 (1969) (statement of

Senator Proxmire). In addition to the interest in protecting the confidentiality and privacy of

personal credit information, the FCRA’s legislative history also makes clear the importance - - to

consumers and CRAs alike - - of the free flow of accurate and reliable consumer credit

information between consumers and credit grantors. The Committee Report cites the “vital role”

of CRAs in our economy and states that credit grantors have the right to the facts necessary to

make sound decisions on whether to grant credit. S. REP. No. 91-517, at 2 (1969). The report

also stresses that consumers have the right to correct erroneous information in their credit files. 

Id. Professor Westin also referenced the importance of accurate credit information, stating that

38

CRAs’ dissemination of consumer reports is to protect consumers’ privacy of their personal credit

information. Congress expressly found that:

“[t]here is a need to insure that consumer reporting agencies exercise their grave

responsibilities with fairness, impartiality, and a respect for the consumer’s right to

privacy.”

15 U.S.C. § 1681(a)(4)(emphasis added). Congress based this finding on the record at the time of

the Act’s genesis, which demonstrated significant concerns in the area of consumer privacy. The

record included, for instance, both media accounts as well as examples cited by Columbia

University Professor Alan Westin regarding CRAs’ disclosure of personal information for noncredit related purposes. (Reidenberg 961/22--963/19).60

Senator Proxmire, in introducing the original legislation, stated that his bill “seeks to

prevent an undue invasion of the individual’s right to privacy in the collection and dissemination

of credit information.”

61 He also noted that “[t]he consumer has . . . a right to see that the

information is kept confidential and . . . he has a right to be free from unwarranted invasions of his

personal privacy. The Fair Credit Reporting Act seeks to secure these rights.”

62 In light of these
CRAs exist to help credit grantors avoid loss through fraud or misuse of credit and to keep the

costs of such losses from falling on the average consumer. Fair Credit Reporting: Hearings on

S. 823 Before the Subcomm. on Financial Institutions of the Senate Comm. on Banking and

Currency, 91st Cong. 73-97, p.91 (1969) (testimony of Alan Westin). Consumers benefit from

strong credit markets, which in turn require accurate, current and reliable data.

63

 Economic Growth and Regulatory Paperwork Reduction Act of 1995 (12/14/95),

S. REP. No. 104-185, at 36 (1995). 

39

concerns, Congress drafted the Act to limit CRAs’ disclosure of credit reports to people with a

“permissible purpose.”

Congressional interest in protecting consumers’ privacy is further illustrated by the 1996

amendments to the FCRA, in which Congress added to the permissible purposes of consumer

reports prescreening for certain defined firm offers of credit and insurance. The Committee

Report to the amendments notes an effort “to balance any privacy concerns created by

prescreening with the benefit of a firm offer of credit or insurance for all consumers who meet the

criteria for the credit or insurance being offered.”

63 In striking this balance, however, Congress

ensured significant privacy protections for consumers, requiring that they receive notice that their

personal credit information is being used for such purposes, and that they have the right to “opt

out” of such use. See 15 U.S.C. § § 1681b(c), (e) and 1681m(d)(1). Trans Union’s practices at

issue here do not provide for such safeguards.

Courts have also recognized that privacy protection of credit-related data is among the

important purposes of the FCRA. The court of appeals in this matter found that “a major purpose

of the Act is the privacy of a consumer’s credit-related data.” Trans Union, 81 F.3d at 234. See

also St. Paul Guardian Ins. Co. v. Johnson, 884 F.2d 881, 884 (5th Cir. 1989); Zamora v. Valley

Fed. Sav. & Loan Ass’n, 811 F.2d 1368, 1370 (10th Cir. 1987); Heath v. Credit Bureau of

Sheridan Inc., 618 F.2d 693, 696 (10th Cir. 1980).

Although enacted congressional policy does not necessarily constitute substantial

governmental interest for purposes of the Central Hudson analysis, Greater New Orleans

Broadcasting Ass’n, Inc. v. United States, 119 S. Ct. 1923, 1932 (1999), we are satisfied that the

interest here is sufficient. First, the FCRA’s legislative history is consistent with other

congressional enactments related to personal privacy and the concerns raised by compilations of

personal information in large databases. In United States Dep’t of Justice v. Reporters

Committee for Freedom of the Press, 489 U.S. 749, 762-67 (1989), the Supreme Court reviewed

in detail the terms and history of the Privacy Act, 5 U.S.C. § 552a, as well as the privacy

exemptions of the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552. The Court recognized,

for example, that “[t]he Privacy Act was passed largely out of concern over ‘the impact of

computer data banks on individual privacy.’” Id. at 766 (quoting H.R. REP. No. 93-1416, at p. 7

(1974)). Additionally, the Court concluded that the essence of the “privacy” interest Congress

sought to protect under the FOIA was the individual’s “control of information concerning his or
64

 See Edenfield v. Fane, 507 U.S. 761, 769 (1993) (for purposes of Central Hudson

analysis, state has substantial interest in protecting privacy of potential clients of certified public

accountants); Whalen v. Roe, 429 U.S. 589, 599 (1976) (although the Supreme Court upheld a

statute authorizing New York state to record names and addresses of consumers receiving

prescriptions for certain drugs, the Court acknowledged that individuals have a protectable

“interest in avoiding disclosure of personal matters”).

65

 U.S. West involved review of an FCC regulation implementing a section of the

Telecommunications Act of 1996. The petitioner argued that the regulation violated the First

Amendment by restricting its ability to engage in commercial speech with its customers. A

majority of the panel applied a Central Hudson analysis and expressed “reservations” about

whether the FCC had “asserted a substantial state interest in protecting people from the disclosure

of sensitive and potentially embarrassing personal information.” U.S. West, 182 F.3d at 1235-36. 

The majority’s skepticism was based upon its concern about the lack of evidence that carriers

such as U.S. West would actually disclose the regulated information to outside parties and thereby

breach consumers’ privacy. The case before us is distinguishable from U.S. West as the facts here

differ significantly. It is undisputed that Trans Union discloses consumer information to third

party target marketers; indeed, the record demonstrates that Trans Union actively promotes the

value of its lists to third party purchasers.

66

 Moreover, as a practical matter, see supra p. 24, Trans Union’s customers do not

purchase lists of people with one tradeline.

40

her person,” by deciding for him or herself the “degree of dissemination” of personal information. 

Id. Such Congressional consistency supports our conclusion that the government’s interest is

substantial.

Furthermore, case law indicates well-settled privacy interests in personal information

generally,64 and financial and credit information in particular. See, e.g., Barry v. City of New

York, 712 F.2d 1554, 1561 (2d Cir.) (“[w]e recognize that public disclosure of financial

information may be personally embarrassing and highly intrusive.”) cert. denied, 464 U.S. 1017

(1983); Millstone, 528 F.2d at 833 (recognizing, in a FCRA case, that the right to privacy is “a

significant personal right”). But see U.S. West, Inc. v. Federal Communication Commission, 182

F.3d 1224, 1228 (10th Cir. 1999) (vacating a Federal Communication Commission (“FCC”)

regulation on First Amendment grounds).65

Trans Union argues that any privacy interest in the existence of a consumer’s credit

relationship is de minimis because only 1% of consumer files in CRONUS do not have a tradeline. 

TUAB 39--40, 72. (Stockdale 906/1-8, 21-23, 904/15-18; CX-358-G). This argument is not

compelling. First, the mere fact that 99% of the consumer records in CRONUS have at least one

tradeline is not indicative of whether there is a privacy interest worthy of FCRA protection.66

Section 603(d) of the Act focuses on the nature of the information disclosed and not the amount

of information worthy of protection. Second, Trans Union itself asserts that CRONUS data relate
41

to a subset of people. The fact that this number is clearly less than the total number of adults in

the United States, demonstrates just how effective tradeline information is in restricting to credit

worthy individuals the pool of consumers eligible to be included in Trans Union’s target

marketing lists.

Also, we believe that Trans Union’s argument ignores the full range of CRONUS

information that Trans Union actually discloses or has disclosed about individuals. As discussed,

Trans Union not only discloses information about the existence of a consumer’s credit

relationship, but also open dates, credit limits, number of tradelines, type of tradelines, among

other information. 

Finally, Trans Union asserts that consumers’ routine disclosure of credit relationships,

through the use of credit cards or mortgage applications that appear on the public record,

demonstrates that consumers do not view credit relationships as private. TUAB at 73. The

examples Trans Union cites, however, involve situations where the consumer knowingly

relinquishes his or her privacy in return for a direct and known benefit that is also sought by the

consumer. In those cases, the consumers were exercising their right to control the dissemination

of their own personal information. See Reporters Committee, 489 U.S. at 763. By contrast,

Trans Union’s disclosure of consumers’ personal credit information - - including the fact that a

consumer has a recently used credit account that is not the subject of a credit dispute - - shares

neither of these important attributes. In fact, such disclosures are made without the consumer’s

knowledge. 

For all these reasons, we find that the government has a substantial interest in protecting

the privacy of consumers’ personal credit information, and we reject Trans Union’s arguments to

the contrary.

b. The Restriction Directly and Materially Advances the 

Government’s Interest

The next question in the Central Hudson analysis is whether the FCRA’s speech

restriction directly and materially advances the government’s interest. To meet this burden, the

government may not rely on “mere speculation or conjecture” but must instead demonstrate that

the restriction at issue will alleviate real harms to a “material degree.” Edenfield, 507 U.S. at

770-71. The Supreme Court has struck down regulations of commercial speech where the

government failed to offer sufficient evidence that the restriction at issue would advance its

interests. See 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 505 (1996) (no “findings of

fact, or indeed any evidentiary support whatsoever”); Edenfield, 507 U.S. at 771 (no studies or

anecdotal evidence presented); see also Rubin, 514 U.S. at 490 (1994) (government submits only

“anecdotal evidence and educated guesses”); cf. Edge Broadcasting, 509 U.S. at 434 (upholding 

federal ban on lottery advertising based solely on “common sense judgment” that the ban would

advance governmental interest in supporting the state’s anti-gambling policies). 
67

 Trans Union cites United Reporting, 146 F.3d at 1135, as an example of a statute

struck down on First Amendment grounds. As noted, supra n.58, the Supreme Court recently

reversed this decision. Furthermore, the FCRA is factually different. The statute at issue in

United Reporting prohibited the release of arrest information for commercial purposes, but

permitted it for “journalistic, scholarly, political, governmental, or investigative purposes.” Prior

to reversal, the Ninth Circuit had found that the governmental interest in protecting the privacy of

arrestees was substantial but that the exceptions to the statute - - which include the right to

broadly publish this information - - precluded it from advancing the privacy interest in a direct and

material way. Unlike the regulation at issue in United Reporting, however, in this case none of

the FCRA’s permissible purposes allows broad public disclosure of consumer report information. 

68

 In particular, the court criticized the position that Trans Union could “separately

obtain” and distribute consumer information - - i.e., gather the information at issue from sources

other than its credit reporting database - - without violating the FCRA. Such a requirement, the

court suggested, would result in a waste of time and resources. Although it did not rule on the

issue, the court indicated that the “disparity” between Trans Union (as a CRA) and its

competitors raised constitutional concerns. Trans Union, 81 F. 3d at 235. The court of appeals’

concern presupposed that Trans Union, wholly independent of its status as a CRA, could gather

for target marketing purposes the same type of rich consumer information that it gathers by way

of its consumer reporting business. As explained infra, the record now before us clearly

establishes that this is not the case; rather, the high quality and comprehensiveness of the

underlying data in Trans Union’s target marketing products stem from its special position as a

CRA.

42

We rely upon substantial record evidence rather than mere conjecture or speculation to

conclude that the FCRA, by limiting CRAs’ disclosure of personal credit information, directly and

materially advances the substantial government interest in protecting the privacy of personal credit

information. Indeed, it is almost tautological - - because the unauthorized disclosure of personal

credit information causes the privacy harm, restricting the unauthorized disclosure of the

information directly limits the infringement on privacy. 

In attacking the FCRA, Trans Union argues that the statute is underinclusive because it

elsewhere allows practices that undermine the consumer privacy interest in the information that

Trans Union’s target marketing lists communicate.67 TUAB at 76--82. The court of appeals

expressed an underinclusiveness concern as well, remarking on the apparent freedom of Trans

Union’s non-CRA competitors to gather and distribute the same information that Trans Union

discloses in its marketing list business.68 

As a general rule, however, a regulation’s underinclusiveness is fatal only where it is

material, substantial or significant. Bad Frog Brewery v. New York State Liquor Auth., 134 F.3d

87, 98-99 (2d Cir. 1998). The Supreme Court has offered the following guidance: 

“Nor do we require that the Government make progress on every front before it can make
69

 Section 623 of the FCRA, 15 U.S.C. § 1681s-2. 

43

progress on any front . . . [T]he Government may be said to advance its purpose by

substantially reducing [the proscribed conduct], even where it is not wholly eradicated.” 

Edge Broadcasting, 509 U.S. at 434; See also R.A.V., 505 U.S. at 387, Moser v. F.C.C., 46 F.3d

970, 974 (9th Cir. 1995). Based on the full record developed on remand from the court of

appeals, as well as the above-cited cases, we conclude that the FCRA’s restrictions are not

materially, substantially, or significantly underinclusive. Instead, we find that any disparity

between Trans Union and its non-CRA competitors is reasonable given Trans Union’s position as

a CRA and the nature of the information it discloses in its target marketing products. In addition,

neither the disclosure of information by credit grantors, nor the practice of prescreening,

significantly undermines the Act’s protection of privacy. Furthermore, the FCRA’s restrictions on

the dissemination of private, credit-related information are not, in fact, restricted to CRAs. 

Section 1681e(e) imposes restrictions on the resale by a CRA’s customer of a credit report that

are similar to the restrictions on the CRA itself. Therefore, the FCRA does substantially reduce

the harm to consumers of intrusion on the privacy of their personal credit information.

(i) The FCRA Regulates the Activities of Trans Union and Other

CRAs Because They Have Access to Vastly Superior Information

The fact that the FCRA applies to CRAs, but not to other target marketing or data

compilation companies, does not render the Act constitutionally infirm. As the record in this case

demonstrates, CRAs are able to quickly obtain a broad array of current, accurate, detailed and

highly personal credit information about consumers. Balancing this unique ability with safeguards

against abuses, the FCRA requires that CRAs disclose such information only to persons with a

permissible purpose as set forth in Section 604 of the Act. A comparison of Trans Union’s

operations to those of its non-CRA competitors demonstrates that Congress acted properly in

treating CRAs differently than other information gatherers. 

Trans Union’s primary non-CRA competitors are Polk, Metromail, First Data, and

ACXIOM. These companies obtain most of their data from state departments of motor vehicles

(“DMVs”), census data, telephone directory white pages, county registrar and tax assessor

records, self-reported surveys, and product registration or warranty cards. Polk, First Data, and

Metromail’s lists are compiled from two primary sources - - DMV data and white pages. (Cleary

3085/9-20, 3114/6-19; TU-119-3; Litz 2969/16--2970/4; TU-115-p.158; Nusbaum 2880/8-12).

As a CRA, Trans Union’s data sources are far superior and, as a result, the information it

obtains through its credit reporting business has considerable advantages over the information of

its non-CRA competitors. The quality of Trans Union’s data is superior in terms of detail and

accuracy as well as availability and comprehensiveness. Credit grantors and other information

providers are responsible for providing CRAs with accurate, complete and up-to-date information

and/or providing supplemental information to correct errors.69 Because Trans Union obtains its
70

 Trans Union’s competitors’ modeled products are not as “predictive” as Trans

Union’s own CRONUS-derived products. (Hinman 2270/13--2271/11).

71

 Trans Union receives information regarding 1.8 billion tradelines per month. 

(Stockdale 908/1-19). Some customers report information on a daily basis to TU; the majority

report on a monthly basis or according to their billing cycles. (Stockdale 904/8-14; Frank CX186 at 19/3-7).

72

 The Court’s holding in Condon v. Reno, that Congress may regulate the sale or

release of personal identifying information, implicitly supports the notion that individuals have a

right to personal data privacy. The same notion is presented here through our determination that

the government, through the FCRA, has a substantial interest in protecting the privacy of

consumers’ personal credit information. See supra pp. 37-41.

44

information from third parties, its information is also less biased and thus more reliable than the

self-reported information many non-CRA information brokers receive. Trans Union’s own credit

scoring witness testified that data from CRAs are objective and better predictors of future credit

performance than information provided by a consumer filling out an application. (Coffman

3806/2-14, 3857/24--3858/4, 3858/17--3859/3; CX-122-P).70 Finally, because Trans Union’s

information is reported and updated on an ongoing basis,71 it is far more current than reports by,

for example, census bureaus and state DMVs.

By virtue of its status as a CRA, Trans Union also has the advantage of being able to

provide an instant compilation of nearly all relevant information. Moreover, some of the more

specialized information that Trans Union has access to and discloses in target marketing lists

simply may not be available to other information brokers. Examples include the existence of

30/60/90 day finance trade; an upscale retail card; a student loan; a premium bank card; and the

open dates of bank cards. (See e.g., TU-130-4; CCPF at 76; TU-117-2; TU-120-2; Schultea

3928/2-4; CX-310-D). Although other types of information that Trans Union discloses may be

separately available from a range of sources, only CRAs have instant access to them all.

Recent legislation and case law have recognized and, indeed, expanded the disparity

between Trans Union and its non-CRA competitors. As noted, Polk, Donnelly, and First Data use

DMV data as a primary source of information and First Data also offers automobile data from

state DMVs. However, the 1994 enactment of the Federal Drivers Privacy Protection Act

(“DPPA”), 18 U.S.C. § 2721, generally restricts state DMVs from disclosing, without the

licensee’s permission, personal identifying information contained in state DMV records. 

Reversing the holding of the U.S. Court of Appeals for the Fourth Circuit, the Supreme Court in 

Reno v. Condon, 2000 WL 16317 (January 12, 2000), unanimously upheld the constitutionality of

the DPPA. Thus, there is no question that the DPPA drastically limits the personal data that

these information brokers can obtain.72 Moreover, the DPPA aside, information brokers have

never been able to obtain driver data on a nationwide basis. By contrast, Trans Union’s coverage
73

 Trans Union understands its superiority as a source for consumer automobile data

and has used this fact as a selling point. One of Trans Union’s promotional letters notes that its

coverage for automobile loan information encompasses all states and is not limited by the

commercial restrictions that some states have imposed upon access to similar information. (CX66-A).

74

 Mr. Kenneth Scott, witness for Trans Union, described the difficulty in obtaining

such data, noting that information brokers send their employees with laptop computers to county

courthouses to input public data and modem it to the front office. (Scott 2659/10-14). 

75

 Even the legislative history reveals a concern that public information may not be as

current as consumer reporting information. “Unfortunately, the [public record] information

cannot always be kept up to date either because it is costly or because the correct information is

simply not available.” Report of the Committee on Banking and Currency, S. REP. 91-517, at 4

(1969). 

76

 Elizabeth Dixon, Account Manager at Performance Data, and Patricia Porretto,

Senior Account Executive at Performance Data, testified to the fact that the non-self-reported

aspect of the Master File is a distinct advantage over other target marketers. (Dixon 292/16--

45

provides continual access to current information on consumers’ auto loans in all 50 states.73

Trans Union enjoys profound advantages with respect to other types of data as well. For

instance, information brokers obtain consumer mortgage information from county records. (Litz

2972/6-9, 2975/5--2976/7; M. Smith 3373/18-23, 3390/18--3392/9; Nusbaum 2889/1-8,

2914/22--2915/3, 2933/22--2934/15; Cleary 3099/16-23; Hinman 2250/5-14). Such

information gathering can be quite burdensome; in Texas alone, for example, information brokers

may need to consult over 240 counties to fully cover the state’s mortgages.74 Trans Union has the

advantage of having national coverage of this information through its single database. This allows

Trans Union to offer more current mortgage information than the public record information nonCRAs sell. It was therefore not surprising when Polk’s Vice President for Operational Planning &

Analysis conceded that Polk’s consumer model assigns greater reliability weight to mortgage data

coming from Trans Union, as compared to the data coming from county records. (Nusbaum

2888/2--2890/13, 2927/6–2928/11).75

Another source of information for Trans Union’s non-CRA information broker

competitors is from consumer surveys and warranty cards where consumers are obviously under

no duty to provide accurate or complete information. As a CRA, however, Trans Union must

“assure maximum possible accuracy” of all the information it gathers and disseminates. Section

607(b), 15 U.S.C. § 1681e(b). Trans Union has stated that self-reported data are “inevitably

biased” (CX-115-Z-6) and has promoted its Master File as a unique source for individual-level

observed behavior data - - “without equal” that is “based on actual behavior - - not self-reported

or neighborhood values.” (emphasis added) (CX-83-C).76 Consumer surveys and warranty
293/4; Porretto 1621/16-20). 

77

 Trans Union also differs from other CRAs in terms of the type of information it

discloses. Although Experian and Equifax disclose credit information to target marketers - -

either directly or through third parties - - they do so only on an aggregated, zip-plus-four basis. 

Such aggregated credit information relates to the typical consumer in a geographic area. By

contrast, Trans Union’s information concerns specific, identifiable individuals. Thus, it intrudes

more acutely on individuals’ privacy. In any event, the lawfulness of zip-plus-four aggregation is

not an issue in this proceeding and we decline to rule on it here.

46

cards are also weak with respect to coverage. The record shows that 20-40 million consumers

respond to surveys or provide warranty cards. (Nusbaum 2879/6-23; Cleary 3088/20--3089/6).

By contrast, Trans Union provides information on over 140 million people. Additionally, several

information brokers use census data to estimate income. (CX-119-Z-7; Cleary 3123). These

data are significantly less timely because they are only reported every ten years whereas Trans

Union’s income estimator, TIE, is updated every 7 days. (Wiermanski 1723/10-24; CX-120-B).

In light of the full record here, we find that Trans Union’s status as a CRA allows it to

collect a much wider array of consumer information that is richer, more detailed and more current

than the information available to its non-CRA competitors. Trans Union could not obtain the

same type and quality of information outside the scope of its consumer reporting business. 

Accordingly, we are not persuaded that the FCRA is unconstitutionally underinclusive because it

treats CRAs and non-CRAs differently.77

Our conclusion is consistent with relevant case law. The Supreme Court has recognized

the special threats to privacy that compilations of information pose, even though each constituent

bit of information may be publicly available elsewhere. In D.O.J. v. Reporters Comm. for

Freedom of the Press, 489 U.S. 749 (1989), the court considered whether a privacy-related

Freedom of Information Act exemption applied to a request for a “rap sheet” (a compiled

database of publicly available information "bits"). The Court found: 

[T]he issue here is whether the compilation of otherwise hard-toobtain information alters the privacy interest implicated by

disclosure of that information. Plainly there is a vast difference

between the public records that might be found after a diligent

search of courthouse files, county archives, and local police stations

throughout the country and a computerized summary located in a

single clearinghouse of information. 

Id. at 764. The Court acknowledged the “. . . power of compilations to affect personal privacy
78

 Trans Union argues that its witness, Kenneth Scott, testified that all of the selects

available from Trans Union were also available from others in the marketplace. (Scott 2711--

2730). We are unpersuaded. In reaching his conclusion, we find that Mr. Scott performed only a

superficial analysis. Mr. Scott examined only what is currently available - - not Trans Union’s

past practices. Importantly, Mr. Scott did not examine the difference in the source of the

information for each select. Thus, he did not take into account that Trans Union, using CRONUS

as its primary source of information, uniquely and instantly has a full range of richer and more

comprehensive information available to it. 

79

 Under this provision, information related solely “to transactions or experiences

between the consumer and the person making the report” is not a consumer report. Section

603(d)(2)(A)(i) of the FCRA, 15 U.S.C. § 1681a.

80

 See, N.J. STAT. ANN. § 56:11-17; PA. STAT. ANN. tit. 69, § 2602; MASS.

ANN. LAWS ch. 93, § 105.

81

 California and Virginia prohibit credit card issuers and merchants respectively from

selling personal information to third parties without notifying the individual and providing him/her

with the ability to opt out; New Jersey prohibits the disclosure of electronic fund transfer

transactions for marketing purposes without consent. See CAL. CIV. CODE § 1748.12; N.J.

STAT. ANN. § 17:16K-3; VA. CODE ANN.§ 59.1-442. Connecticut prohibits financial

47

that outstrips the combined power of the bits of information contained within.”

78

 Id. at 765. 

(ii) Credit Grantors Do Not Disclose the Same Information As CRAs

To further support its underinclusiveness argument, Trans Union points to the

“transactions or experiences” exception in Section 603(d)(2)(A)(i) and asserts that this provision

undermines privacy protection under the Act because it allows credit grantors to disclose, for

target marketing purposes, substantial information about their own customers.79 We disagree. 

Trans Union introduced evidence demonstrating that Wachovia, First Card, Discover, First USA

Bank, and American Express provide credit information on their credit card customers for target

marketing. (Eulie 2376–78, 2381; Koppin 588–589; Stormoen 3165–66; Scott 2614--2622,

2628--2630). The information available to a single credit grantor, however, is far more limited

than Trans Union’s CRONUS database, which compiles information from hundreds of creditors. 

Also, the record shows that credit grantors generally do not disclose particulars about credit

accounts beyond the name and address of account holders. They do not, for example, disclose

open dates or credit limits. (Pendleton 405/15–406/3; Koppin 588/6–589/6, 596/24–597/18;

Stormoen 3165/3–3168/4; Eulie 2376/7–2377/23, 2380/4-10). Further, the ability of creditors

and other merchants to collect customer information and disclose it may be limited by state law. 

New Jersey, Pennsylvania and Massachusetts, for example, prohibit merchants from collecting

personal identification information that is not required for the transaction.80 Other states prohibit

the disclosure of information by merchants and financial institutions.81 Because it is a CRA,
institutions from selling the names of card holders or disclosing financial records without written

consent. See CONN. GEN. STAT. Ann. § 42-133gg; CONN. GEN. STAT. § 36a-42 (1997).

82

 The NMF discloses two types of information in two “fields”: (1) a counter field

that shows the number of credit cards a consumer has up to nine, and (2) a bank card field that

indicates whether there is one bank card or not. (Schultea 3911/3–3913/7, 3943/6-23). The

NMF is not kept current and a record is deleted only when the person moves or dies. (Schultea

3912/4-12, 3918/24--3919/7, 3920/2-11). The NMF does not reveal whether the person has

obtained or used credit within a specified time period; instead, it reveals only whether a consumer

has ever had a bank card and how many, up to nine, accounts the consumer has ever had. Mr.

Schultea, President of Business Development, testified that in all likelihood, the NMF contains

references to credit card accounts that have been closed and/or are currently inactive. (Schultea

3922/3-14). The NMF also does not indicate open dates of any of the accounts, or the type of

credit a consumer has obtained (other than the existence of a bank card). (TU-130 p. 4; TU-117

p. 2; TU-120 p. 2; Schultea 3928/2-4; CX-310-D). Finally, as for coverage, the information in

the NMF comes from only 20-25 retail companies and bank clients with credit card customers. 

(Schultea 3915/2–3916/21).

83

 We understand that substantial development of broad-based information-sharing

agreements, in the presence of an ever-growing electronic information-handling medium, may

advance the quality of information that such cooperatives offer. It is possible that over time, the

disparity between CRAs and non-CRAs may narrow. If so, Congress may find it appropriate to

respond to new threats to financial privacy with new legislation as they arise. Cf. Gramm-LeachBliley Act of 1999, Pub. L. 106-102 (limiting, inter alia, disclosure of nonpublic personal

48

Trans Union is not subject to these restrictions.

Trans Union also cites the National Marketing File (“NMF”) created by Business

Development Inc. - - a target marketing list provider - - as additional evidence that the FCRA’s

“credit grantor” exception can be used to intrude upon a consumer’s financial privacy. This

argument fails because NMF information is far less complete, detailed or timely than the data in

CRONUS.82

Similarly, the existence of cooperatives that share data and reveal consumer credit

information also fails to support Trans Union’s underinclusiveness argument. One such

cooperative, Abacus, collects information regarding consumers’ mail order buying behavior from

700 catalogers and shares the information among its members. Abacus discloses how many credit

transactions a consumer has had over his/her lifetime, how much money a consumer has spent

using credit cards over the last 12 months, and other information about a person’s history of

buying by credit card. (TU-206). Like NMF’s information, however, this type of data also does

not share the same level of comprehensiveness as the Trans Union information. Moreover,

several of the state laws previously described may limit the disclosure of personal credit

information to such cooperatives.83
information to nonaffiliates). But that does not change the legal obligations the Act imposes upon

CRAs like Trans Union as a result of their unique status and the benefits they receive. At this

time, the range and detail of information provided by CRAs far surpasses that of other information

brokers and supports the legislative scheme.

84

 Statement of Senator Proxmire, Fair Credit Reporting: Hearings on S. 823

Before the Subcomm. on Financial Institutions of the Senate Comm. on Banking and Currency,

91st Cong. 92 (1969). He also stated that “[a] second aspect to the problem of confidentiality is

the use of information inconsistent with the purposes indicated when the information was

collected.” 115 CONG. REC. S2340, 2410-16 (1969). 

85

 Fair Credit Reporting: Hearings on S. 823 Before the Subcomm. on Financial

Institutions of the Senate Comm. on Banking and Currency, 91st Cong. 73-97, at 92 (1969)

(testimony of Alan Westin).

86

 Fair Credit Reporting: Hearings on S. 823 Before the Subcomm. on Financial

Institutions of the Senate Comm. on Banking and Currency, 91st Cong. 224, 228 (1969)

(statement of Harry C. Jordan, Chairman of the Board, Credit Data Corp., “[Credit Data’s] rules

can be stated as follows: . . . Credit information is available to credit grantors only for credit

49

(iii) Prescreening

Finally, Trans Union argues that the FCRA is underinclusive because the Act, as amended

in 1996, allows the practice of prescreening for so-called “firm offers” of credit and insurance. 

We find that Congress’ decision to allow prescreening does not constitutionally undermine the

FCRA. Any privacy intrusions that result from prescreening are significantly less harmful than the

privacy intrusion at issue in Trans Union’s target marketing business. In prescreening, the types

of consumer report information that can be used are restricted - - Section 604(c)(2) - - and

prescreening itself may provide a concrete benefit to consumers, i.e., a “firm offer of credit,” that

they might not otherwise have. Equally important is the FCRA’s requirement that those seeking

to use the prescreening mechanisms notify consumers that they may opt-out of future,

prescreened solicitations. 15 U.S.C. §§ 1681b(c) and 1681m(d).

While a central concern of legislators at the time the FCRA was enacted was to protect

the privacy of consumers’ personal credit information, a related concern was to limit the

disclosure of consumers’ credit information. This latter concern and the means to address it were

raised throughout the 1969 legislative hearings. Senator Proxmire, in introducing the original

legislation, noted that “[t]he consumer has . . . a right to see that the information [is] . . . used for

the purposes for which it is collected . . .”

84 Professor Alan Westin also testified that “[t]he

central issue of privacy is the release of personal credit information to other than credit

grantors.”

85 Even a representative from the credit reporting industry testified that information

gathered specifically for credit-granting purposes should not be made available for other

purposes.86
purposes. . . Credit Data, as a matter of policy sells information only to credit grantors.”).

87

 Congress has used a “tiered” privacy-protecting approach in other areas as well. 

In the Cable Communications Policy Act of 1984, 47 U.S.C. § 551, the Electronic

Communications Privacy Act of 1986, 47 U.S.C. § 222(c), and the Video Privacy Protection Act

50

Congress’s approach to prescreening, in particular its requirement of notice and opt out

rights for the consumer, is consistent with the twin goals of protecting the privacy of consumers’

personal credit information and ensuring that consumer credit information not be used for

inappropriate purposes. Permitting the disclosure of certain consumer credit information for

prescreening, as tailored by statutory limitations, does not undermine the FCRA. 

Consequently we find that the FCRA is not underinclusive. Congress recognized that

CRAs like Trans Union, by virtue of their credit reporting business, are uniquely positioned to

obtain the most up to date, detailed and comprehensive set of personal credit information on an

individual, observed basis. Mishandling such information poses a special threat to consumer

privacy. Therefore, by limiting the disclosure of this information, the FCRA directly and

materially advances the government’s interest in protecting the privacy of personal credit-related

information. To find otherwise would allow Trans Union to have it both ways - - i.e., to enjoy

unique access to the widest array of the best consumer credit information available, without

following the restrictions Congress imposed in order to protect consumer privacy. Further, the

fact that the FCRA allows credit grantors to disclose limited information and permits prescreening

does not make the Act underinclusive.

c. The Restriction Is Narrowly Tailored

The final prong of the Central Hudson test requires a reasonable fit between the goals of

the statute and the statute itself. The proper fit “is not necessarily perfect, but reasonable”; it

must “represent[] not necessarily the single best disposition but one whose scope is ‘in proportion

to the interest served.’” Board of Trustees of the State University of New York v. Fox, 492 U.S.

469, 480 (1989). With these words in mind, it is appropriate to consider whether there are

alternative means of accomplishing the government’s stated interest with a lesser intrusion into

speech. In doing so, we recognize that a commercial speech restriction may be unconstitutional if

there is a “far less restrictive” alternative. Pearson v. Shalala, 164 F.3d 650, 658 (D.C. Cir.

1999). 

We believe that the FCRA’s restriction on the disclosure of consumer reports, including

Trans Union’s target marketing lists, is narrowly tailored to protect the privacy of consumers’

personal credit and other financial information. Moreover, we do not believe that alternative

restrictions proposed by Trans Union are “far less restrictive,” nor would they afford sufficient

privacy protection. 

Congress established a three-tiered system for disclosure and privacy protection:87 
of 1988, 18 U.S.C. § 2710, Congress afforded different levels of privacy protection - - from

disclosure without consumer’s permission, to notice and opt out, to opt in - - as the uses of such

information become less related to the purposes for which the information was collected.

88

 Survey evidence introduced by Complaint Counsel indicates that consumers view

credit relationships as private and that they experience a privacy invasion from the disclosure of

the existence of types of credit accounts. (See CX-274; Mazis 1109/20-25). The survey,

conducted by Dr. Michael Mazis, assessed the attitudes of 1,002 consumers regarding the use of

information derived from CRONUS and from credit reports to compile marketing lists. (Mazis

1080/10-18; CX-354-A; Waldeck 1060/12-16). A total of 68.1% of the respondents found the

use of credit report information for the compilation of marketing lists to be unacceptable. (Mazis

1105/13-20; CX-354-B). Based on these results, Complaint Counsel’s expert opined that

51

C No Consumer Permission Required. Where a consumer has initiated a transaction

involving credit, employment, or insurance, for example, CRAs may provide a

consumer report for purposes of that specific transaction without the consumer’s

permission. 

C Notice and Opt Out. Where a consumer has not initiated such a transaction, but

where a creditor or insurance company seeks to make a “firm offer of credit or

insurance” (i.e., prescreening), a CRA may provide certain consumer report

information as long as the consumer is provided notice that his or her name was

provided by a CRA and the opportunity to opt out of appearing on such lists in the

future, i.e., notice and opt out rights. 

C Opt In. Where a consumer has not initiated a transaction, and where the purpose

of the credit report is not for a permissible purpose under the Act, a consumer

report may only be disclosed with a consumer’s express consent, i.e., an “opt in”

system.

This three-tier scheme is sufficiently tailored to achieve Congress’s goal. Congress’s

determination that consumers would not be adequately protected from privacy intrusions by target

marketers through a “notice and opt out” system is reasonable. Specifically, Congress’s decision

to favor the more privacy protective “opt in” is a sound system in light of documented problems

of credit reports being widely disclosed for purposes unrelated to credit.

Trans Union contends that a simple opt out procedure would adequately protect consumer

privacy without compromising Trans Union’s speech. TUAB at 82--85. However, this proposal

is untenable and is based upon a misstatement of the Equifax/Harris findings. According to Trans

Union, the 1996 Equifax/Harris survey revealed that 80% of consumers surveyed who object to

the use of credit reporting information, change their minds when they are told of the right to opt

out. (TU-88; Beales 3656--3665). Those survey findings, however, examined consumer

attitudes about the use of credit reporting information to provide pre-approved offers of

automobile insurance or life insurance. The survey did not examine consumer attitudes toward

the use of such information for target marketing (at issue here).88
consumers have a strong privacy interest in the use of information from their credit reports. 

(Mazis 1107/23-25). 

89

 Indeed, although the Direct Marketing Association offers consumers the right to

opt out of appearing on its members’ marketing lists, most consumers are unaware that they can

opt out of such lists. (Beales 3669/13--3670/10; Westin 3639/8-19; TU-88-2-58). It is also

significant that, when faced with a question at oral argument about whether Trans Union would

agree to a notice and opt out system in the target marketing area, counsel for Trans Union

evinced a strong reluctance to do so unless non-CRA competitors were similarly asked to abide

by a notice and opt out system. (Oral Arg. 54/3-7). Trans Union’s pursuit of equal treatment

vis-a-vis non-CRA competitors is again based on its failure to recognize the special privacy

concerns that CRAs’ databases create.

90

 S. 650 would have permitted CRAs to sell target marketing lists that disclosed a

wide variety of information, including information that is used in credit eligibility decisions and

that bears on consumers’ credit worthiness, such as number of tradelines, open dates of loans, and

types of tradelines.

52

Additionally, to the extent that Trans Union contends that opt out rights alone would

adequately protect consumers in the target marketing context, Trans Union ignores the fact that,

in the prescreening context, Congress authorized a notice and opt out system. The notice

segment of the system is essential because it provides consumers the information to allow them to

exercise opt out rights.89 

Further, Trans Union argues that S. 650, 104th Cong. (1995) (a bill that was not enacted)

could serve as a less restrictive alternative to the FCRA. (TU-214). Before a less restrictive

alternative can be considered, however, it is necessary to determine whether the alternate

approach furthers the government’s interest to the same extent as the FCRA. Because S. 650

would have provided considerably less data privacy,90 we cannot conclude that Congress acted

unreasonably or disproportionately in the balance it struck between consumer privacy and

commercial speech. Accordingly, the question of whether S. 650 would have had less of an

impact on speech than the FCRA is irrelevant. 

Based on this analysis, it is evident that the FCRA’s restriction on Trans Union’s target

marketing lists is sufficiently narrowly tailored to achieve the goal of protecting the privacy of

consumers’ personal credit information. We therefore conclude that the provisions of the FCRA

at issue here do not violate the First Amendment. 

B. The FCRA Is Not “Void for Vagueness” Under the Fifth Amendment Due

Process Clause

As a final argument, Trans Union claims that the FCRA is unconstitutional because the

term “eligibility for credit” is too vague a concept under the Fifth Amendment. As previously
91

 Trans Union contends that the level of scrutiny should be especially demanding

because the FCRA is a content-based (as opposed to content-neutral) regulation of speech. We

disagree. Stringent scrutiny of a content-based regulation, assuming this is a content-based

regulation, is necessary only where the regulation will impose an “obvious chilling effect on free

speech.” See Reno v. ACLU, 521 U.S. 844, 871-72 (1997). Here, any “chilling” impact of the

regulation is mitigated by the fact that the regulation is a civil regulation, and it affects the

conduct of sophisticated businesses who have a substantial incentive, and the ability, to determine

the reach of the statute. Indeed, the D.C. Circuit has indicated that in the context of an

administratively enforced regulation of commercial speech, all the Fifth Amendment requires is

that “it must be possible for the regulated class to perceive the principles which are guiding

agency action.” Pearson, 164 F.3d at 661. An agency can met this requirement by “case by case”

adjudication rather than through “a comprehensive definition all at once.” Id. That standard is

met here. 

53

discussed, the definition of consumer report in the FCRA is designed to protect personal creditrelated information that is “used, expected to be used, or collected in whole or in part for the

purpose of serving as a factor in establishing the consumer’s eligibility for credit.” 15 U.S.C. §

1681a. Trans Union argues that defining consumer reports based on the ultimate purpose to

which information is put makes it impossible to know what information is covered and what is

not. In this case, we disagree for the following reasons.

A statute is void for vagueness if its prohibitions are not clearly defined so as (1) to give

regulated parties adequate notice and (2) to prohibit arbitrary and discriminatory law enforcement. 

Grayned v. City of Rockford, 408 U.S. 104, 108 (1972); United States v. Thomas, 864 F.2d 188,

194 (D.C. Cir. 1988). The level of vagueness that the Constitution will tolerate depends upon the

type of regulation at issue. 

Thus, economic regulation is subject to a less strict vagueness test because its subject

matter is often more narrow, and because businesses, which face economic demands to

plan behavior carefully, can be expected to consult relevant legislation in advance of

action. Indeed, the regulated enterprise may have the ability to clarify the meaning of the

regulation by its own inquiry, or by resort to an administrative process. The Court has

also expressed greater tolerance of enactments with civil rather than criminal penalties

because the consequences of imprecision are qualitatively less severe. And the Court has

recognized that a scienter requirement may mitigate a law’s vagueness, especially with

respect to the adequacy of notice to the complainant that his conduct is proscribed.

Finally, perhaps the most important factor affecting the clarity that the Constitution

demands of a law is whether it threatens to inhibit the exercise of constitutionally

protected rights. If, for example, the law interfered with the right of free speech or of

association, a more stringent vagueness test should apply.

Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498-499 (1982).91
Trans Union also claims that stricter scrutiny is appropriate because Section 620 of the

FCRA provides criminal sanctions in certain situations. However, this action is civil (indeed, the

Commission lacks the authority to enforce the criminal provision of the FCRA) and the only issue

here is whether the FCRA is sufficiently precise to support the Commission’s civil enforcement

action, not whether the FCRA would be unduly vague when enforced criminally. Nonetheless,

even if judged as a criminal statute, the scienter requirement - - Section 620 covers a “knowing”

or “willing” unauthorized disclosure - - “may mitigate a law’s vagueness, especially with respect

to the adequacy of notice to the complainant that his conduct is proscribed.” Hoffman Estates,

455 U.S. at 499.

54

Based on this guidance and the facts contained in the record, we conclude that the term

“eligibility for credit” in the FCRA’s definition of a “consumer report” is not too vague to provide

adequate notice to Trans Union of the conduct proscribed under the FCRA. We also believe that

the term is sufficiently clear to prevent arbitrary and discriminatory enforcement. This is true even

though the Act has some impact upon Trans Union’s First Amendment right to freedom of

expression. 

The record here amply demonstrates that information that indicates the existence of credit

relationships, and other information about such credit relationships, is information that is used and

expected to be used in establishing a consumer’s eligibility for credit. We therefore disagree with

Trans Union’s contention that linking the information protected by the Act to the purpose for

which the information is used is impermissibly vague. Our conclusion is buttressed by the

Supreme Court’s instruction to examine whether the meaning of a regulation is clear from an

industry member’s vantage point. Hoffman Estates, 455 U.S. at 501 n.18. Trans Union is a CRA

that assists in the development of credit scoring models and has a substantial prescreening

business. See discussion supra pp. 4 and 17-18. Its business also requires that it know what

information is used in establishing a consumer’s credit eligibility. Accordingly, Trans Union

cannot credibly argue that it had insufficient notice as to the information that falls under the

consumer report definition. Indeed, Trans Union is statutorily obligated to know how its

information is used. See Sections 604(a) and 607 of FCRA. We can also infer knowledge

through Trans Union’s termination of many of the practices now challenged by the Commission,

following the statutory amendments making clear that such conduct could lead to monetary

penalties. See discussion supra p. 11. 

Finally, Trans Union asserts that it is uncertain whether it can disclose certain information

- - including name, address, social security number, and credit performance data - - on a zip-plusfour basis. Trans Union asserts that this uncertainty renders the FCRA unconstitutionally vague. 

We disagree because any question pertaining to the disclosure of these particular pieces of

information is irrelevant to Trans Union’s use of core consumer information which is of concern

in this case. Moreover, any claim of “vagueness” is without merit as the Commission has never

condoned the disclosure of credit performance information aggregated on a zip-plus four basis

and pursuant to Pearson, we need not address this issue here where the question is not before
92

 Trans Union asserts that this case is analogous to the recent Supreme Court case

Reno v. A.C.L.U., 521 U.S. 844, which struck down portions of the Communications Decency

Act (“CDA”). The regulation in Reno defined prohibited speech “by contemporary community

standards” and the Court held the speech restriction unconstitutional. Id. Here, Trans Union

argues that the Commission’s application of the FCRA is similarly dependent upon the views of

the community receiving the message, implying that the FCRA is also constitutionally flawed. 

This analogy fails for several reasons. First, the Reno Court expressly declined to make any

finding of constitutionality under the Fifth Amendment’s void for vagueness doctrine, deciding the

case on First Amendment grounds only. Id. at 864. Second, Reno involved a criminal statute and

a complete ban on pure speech and therefore was evaluated under a stricter standard. Third,

applying the definition of “consumer report” and the term “eligibility for credit” in this case does

not depend on the views of the “community” recipients of the information. It depends on the use

to which such recipients put the information, a use which Trans Union could easily ascertain. 

Finally, Trans Union’s liability is also based in part on our finding that Trans Union provided

information that it expected to be used in credit granting decisions. See discussion supra p. 33. 

93

 See Grayned, 408 U.S. at 114 (“As always, enforcement requires the exercise of

some degree of police judgment, but, as confined, that degree of judgment here is permissible.”).

55

us.92

Accordingly, we conclude that the definition of “consumer report,” including the term

“eligibility,” under Section 603(d) of the FCRA gives regulated parties like Trans Union adequate

notice of what conduct is proscribed and is sufficiently clear to avoid risk of discriminatory

enforcement.93 For these reasons, the FCRA is not unconstitutionally vague. 

VII. CONCLUSION

Based on the foregoing, as well as the thorough and substantial record in this case, we find

that Trans Union violated Sections 604 and 607(a) of the FCRA because its target marketing lists

are “consumer reports” that were disclosed without a “permissible purpose.” We also find that

the FCRA, as applied in this case, passes constitutional muster.