Personal Data and The Law
You may recall an article in issue 97:06:03, "Driver's Licenses and Personal Information," which discussed some issues consumers have with personal data, the DMV, and credit bureaus. As we pointed out, many consumers are uneasy with the data consumer reporting agencies have at their fingertips, who they can release it to, and where they get the data.
Obviously, these are valid concerns since it was recently learned that the California DMV illegally sold confidential addresses to Safeway supermarkets. As you may have noticed in our previous article, the DMV can release a lot of information to be used for a lot of different purposes, but direct marketing is not one of them. Although Safeway says the information was used for data gathering and they did not disclose the data, the DMV did not get the promise in writing, as is required.
It was also found that the DMV had overcharged for legitimate requests and profited almost 100 million in the last six years. The DMV didn't calculate the costs correctly, and hasn't fixed them in six years so it can't judge or manage product profitability.
So, we know there are problems with distributing data. What about where the data originates? Is it accurate? Are there laws to regulate such data and if so, are they being enforced?
The answers to these questions were demonstrated in a suit and appeal filed by a consumer against TransUnion and Experian (formerly TRW). The plaintiff's identity was assumed by a criminal who obtained Diner's Club and Salon Furniture credit cards and left quite a debt.
In the original case and subsequent appeal, it was ruled that the bureau wasn't responsible or liable for reporting erroneous data because the data they received from the card companies was conflicting, even though they were notified of the correct data. Evidently, the card companies reported the debts to TransUnion and subsequently notified them of the error, but also continued to report the debts on their magnetic tapes updates. TransUnion argued successfully that it is not their job to reinvestigate when a creditor informs them incorrectly.
What that suit, the subsequent dismissal, and the DMV fiasco illustrate is that credit protection laws (such as the Fair Credit Reporting Act) aren't very effective if they're not monitored and enforced in the courtroom. The bureaus won't be interested in verifying information unless they are held accountable for erroneous data. As it is now, there is no reason for them to make efforts to seek out more data that what is provided by the creditors, accurate or not.
