small change toward a rich life

Score! Lawsuit results in free credit reports

In the 1990s credit reporting company TransUnion thought it had a great way to make more money. By filtering its already enormous database of credit information on U.S. consumers, it could sell highly targeted mailing lists to marketers.

Just one little problem, though: the Fair Credit Reporting Act, which allows the use of such data for credit, employment, licensing, and insurance transactions, but not for ordinary old unsolicited advertising. Thousands of junk-mail deluged consumers hired lawyers and began legal protest.

TransUnion shut down the marketing-list practice in 2001, but it’s taken an additional seven years to settle the consolidated class-action suit over the practice. The result: a $75 million payback, and free credit report/score access for anyone who’s had an open line of credit since 1987. That includes not just credit cards, but mortgages, car loans, and student loans as well.

That’s an estimated 160 million living Americans.

To partake of this punitive largesse, you may register at listclassaction.com. You will be provided with four settlement options, though unless you care to file an individual lawsuit the first two can be quickly discounted. The remaining choices are: six months of credit monitoring and a ‘potential cash payment (if available)’, or nine months of ‘enhanced’ credit monitoring. ‘Enhanced’ refers to ‘a suite of insurance scores and a mortgage simulator service’. Both options include access to your TransUnion credit score

In a nutshell: everyone gets six months of credit report and score access; the choice is between an extra three months of access, or a chance at a bite of the dollar pie. I’m not a big gambler, and I note that the $75 million pot has to cover more than a decade of lawyers’ fees before being divided between up to 160 million possible claimants, so I’m going to opt for the 9-month option.

Nothing happens right away; registering just means you will be notified by email when the settlement is final (probably late September). You then have until March 2009 to activate your six or nine months of service. Cash distributions, if any, will take ‘at least two years,’ no specified maximum.

Unlike the normal monitoring service sold by TransUnion, you do not need to give a credit card number to activate it, and you will not be automatically billed for renewal at the end of the 6- or 9-month period.

Also note that you only get TransUnion report and score access, not Experian or Equifax, which will almost certainly differ. Still, that’s 1/3 of your credit history. One benefit to having score access over a period of months is that you have time to make changes and see exactly what effect different actions have on your score, all for free. If I learn anything, I’ll certainly report it here!

Other sources: CNN, LA Times


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