Credit agency picks privacy, drops ties to junk-mailers Equifax won't rent its mail lists to direct marketers.

August 09, 1991|By Los Angeles Times

Citing concern over consumer privacy, one of the nation's largest credit reporting agencies said yesterday that it would stop renting mailing lists to direct marketers.

Atlanta's Equifax Inc., which has been under pressure from the New York attorney general to stop the practice, admitted the move probably would not slow the flow of junk mail solicitations. But Equifax said it made the decision -- which will cost the company $11.5 million each year -- to foster better customer relations.

"This decision clearly reflects . . . our commitment to maintaining the delicate balance between consumer concerns about fair information practices and business' legitimate information needs," said Equifax President and Chief Executive C.B. "Jack" Rogers Jr. in a prepared statement.

The action by Equifax is part of a larger debate over credit bureaus' responsiveness to consumer complaints about inaccuracies and the confidentiality of credit reports.

The issue has attracted the attention of Congress. And last month lawsuits were filed against TRW -- an Equifax rival -- by New York and 10 other states, alleging that the agency fails to keep accurate records and ignores consumers' privacy by selling their names to marketers.

Shortly after the lawsuits were filed, Equifax and TRW, whose credit bureau operations are based in Orange, Calif., announced that they would set up toll-free telephone numbers and take other steps to be more accessible to the public.

Martin Abrams, director of consumer affairs and policy analysis for TRW, would not comment on the lawsuit against his company or Equifax's action, but he said TRW would continue to rent consumers' names to direct marketers.

TRW, said Abrams, "has long had a policy of respecting the wishes of any consumer who for whatever reason wishes to opt out of [the] TRW list data base." TRW believes its approach is "lawful, sensible and in the public interest," he added.

A spokesman for the third major credit agency, Chicago's Trans Union Corp., was not immediately available for comment.

Robert Elis Smith, a credit agency critic who publishes the Privacy Journal from Providence, R.I., applauded Equifax's decision not to rent its lists to direct marketers.

"Credit files ought to remain sacrosanct and confidential," Smith said. Equifax, he added, "made a very progressive move. I hope its two competitors do the same thing."

Equifax spokeswoman Tina Buckholtz said the list rental business "was not as profitable as we thought," even though the company will lose about $11.5 million a year in revenue, or 1.2 percent of its total sales, by discontinuing the service.

Equifax had rented about 120 million names in its credit files to about 225 direct mail marketers who could request that the names be segregated by sex, income, age and other demographic factors, Buckholtz said.

Buckholtz said Equifax will fulfill its current contractual commitments to direct marketers within the next 90 days. However, the company will continue its separate enterprise of providing prescreened lists for "a credit grantor making a legitimate credit offer" such as a credit card solicitation, Buckholtz said.

Chester Dalzell, a spokesman for the Direct Marketing Association, a New York trade group, predicted Equifax's decision would not significantly deter direct marketers, because there are "many other sources of [private] information" available from publishers and mail order companies themselves.

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