Experian Sale’s Effects on File Access

The purchase of Experian Corp. by British retail and financial services giant Great Universal Stores has raised new questions about the sanctity and security of the millions of personal and business credit files that Orange-based Experian maintains in the U.S.

Just five years ago, the entire credit reporting industry was embroiled in controversy over inaccurate data and loose controls over how information was disseminated and who got it. That resulted in a series of lawsuits and enforcement actions and a number of voluntary cleanup efforts by three industry leaders--Equifax Inc., Trans Union Corp. and Experian, which at the time was the information services unit of TRW Inc.

But the Experian sale “is making us concerned again . . . about what this will do to the ability of the Federal Trade Commission and the state attorneys general to enforce the laws,” says Pam Pressley, director of the California chapter of Public Interest Research Group.

Here are answers to some of the questions the deal raises:

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Q: Does this mean that lenders and businesses in England can now obtain my personal or business credit data?

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A: No more than they could before the deal was struck. U.S. laws about access to files still apply to Experian, and European laws about credit-file access usually are stricter. Unless a U.S. resident applies for credit, an insurance policy or a job overseas, foreign businesses have no more right than U.S. businesses to look into detailed personal credit information files. Additionally, credit reporting companies say European laws prevent cross-border sharing of information.

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Q: Experian sells direct marketing data and Great Universal has a huge direct mail retail business. Will consumers in the U.S. soon start being deluged with overseas retailers’ catalogs and junk mail?

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A: There’s probably going to be a lot of discussion in GUS headquarters in London about utilizing Experian’s demographic data to bolster U.S. sales. The conglomerate has stores in the U.S. and could benefit from a big direct mail blitz. But overseas marketers already can obtain all the U.S. mailing lists they want. There are no laws restricting them.

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Q: Will this make it more difficult for me to correct any errors that get placed in my credit file?

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A: Only if the error is put there by a European credit issuer. A controversy exists in the U.S. over who should correct erroneous credit reports, with the credit-reporting companies maintaining that they are only conduits and have no standing to expunge information. So if you get involved with a European business that places incorrect information in your file, you’ll probably have to spend a lot of time and money on overseas postage and phone bills to get it cleaned up. But because of restrictions on cross-border sharing of data, the erroneous information should only appear in your file in the foreign country.

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Q: How is my privacy protected?

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A: U.S. law generally limits credit file access to lenders, prospective employers, insurance companies, law enforcement agencies and credit issuers (a broad category that can include landlords). None of the information is supposed to be used to develop mailing lists or other data that the credit bureaus sell. Laws in foreign countries vary, but credit issuers and consumer groups say Europeans are far more protective of personal data than we are in the U.S. The European Community last year adopted a directive on the use of personal data by information companies aimed at ensuring that the rules don’t change from nation to nation.