Double duty?

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Sometimes it’s great to put stuff to more than one use.  Think the versatile Swiss Army knife, the iconic Little Black Dress, or the typical elementary school “cafetorium” where kids can eat lunch, shoot hoops, and put on plays.  But when what’s at issue is information from people’s credit reports, that kind of double duty can violate the Fair Credit Reporting Act — as the FTC’s $1.8 million settlement with Teletrack, Inc., makes clear.

In FCRA parlance, Teletrack is a “consumer reporting agency.”  Its primary line of work is selling credit reports to payday lenders, rent-to-own stores, non-prime rate auto lenders, and other companies that serve non-traditional credit customers.  Companies use the reports to decide whether they’ll extend credit, and on what terms.

When prospective customers apply for credit, they give the payday lender or car lot rafts of personal information.  The company, in turn, passes the data on to Teletrack when they ask for a credit report on the customer.

But Teletrack had a sideline business.  In addition to using that information to provide credit reports, Teletrack put it to further use by creating a separate marketing database of people who had applied for credit with payday lenders, rent-to-own stores, etc.  Teletrack then sold their names and addresses to marketers looking to pitch them other stuff.  For example, Teletrack sold lists of people who’d sought payday loans to companies that wanted to use that information to target potential customers.

As the FTC’s complaint alleges, those marketing lists are “consumer reports” under FCRA because they contain info about a person’s creditworthiness.  But under FCRA, consumer reporting companies can’t sell credit reports without a specific “permissible purpose.”  According to the FTC, hoping to make a buck by selling marketing lists isn’t one of those “permissible purposes.”

Filed in federal court in Georgia, the FTC’s settlement with Teletrack requires the company to change its business practices and imposes a $1.8 million civil penalty.


Hello I called ftc in trying to obtain information in reference to a buissness obtaining a credit report in which my daughter gave no permission to this buissness to do so and went ahead and did it. I called talked to a lady who gave me topics and seemed not to be interested or take the time to talk to me only if i wish to make a complaint. I went on the computer and there is all kind o f topics one was the permissible report and fair credit report. Thats the problem no one helps you anymore only paper work to answer a simple question. I know you scrap this message or don't give a damn about what i said but maybe just maybe some body will answer my simple question. Thanks HOWARD FRIEDMAN.
Hi, Mr. Friedman. I'm sorry you didn't the get the information you were looking for. We do our best to respond to the thousands of consumers we hear from each week, but when we don't, we need to know about it so we can try to do better. To respond to your question, it's tough to tell if what the company did in this case was wrong. If you could give us a bit more information about how this happened, it might be helpful. Was this a company she had applied for a job with, for example, or was this a landlord considering a rental application? We want to make sure your daughter's privacy is protected, so without giving specific names, it would be helpful if you could give a bit more info about the context this happened in. Also, under the law, the FTC is not allowed to get involved in individual dealing between a consumer and a business, but we want to make sure we answer your question to the best of our ability. We do give a damn, Mr. Friedman.

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