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Three giant credit bureaus -- TRW, Equifax and Trans Union -- dominate the consumer-data industry, which also includes about 450 smaller outfits. Every month the Big Three purchase computer records, mostly from banks and retailers, that detail the financial activity of virtually every adult American. TRW and Equifax each have 150 million individual files. According to a report in the Wall Street Journal, anyone who applies for a credit card is listed on Equifax's "credit-seekers hot line," a popular buy for marketers, while the Bankcard hot line at Trans Union lists all credit-card purchases.
The Big Three credit bureaus argue that their products do not disclose truly confidential details. But until recently, for instance, Equifax sold lists of consumers who used their credit cards more frequently than the average. Combining that with census data, the company then used a statistical model to estimate the general range of each card user's income, though not to specify the actual amount. "We would not disclose a person's total balances or how much credit they have available in absolute dollar terms," says John Baker, senior vice president of Equifax, which serves 60,000 business customers and whose profits for credit reporting and information packaging last year totaled $366 million.
That practice proved too controversial, and this summer Equifax got out of the business of selling direct-marketing lists based on its credit files. But smaller data banks have been breaking down figures to offer for sale such tidbits as the location of nearly every household in the U.S. that recently brought home a newborn child. For about $25 to $95 a month, plus search charges, customers of Information America, an Atlanta-based company, have access to profiles of 80 million households. By typing a name into a home computer, a subscriber can obtain that person's address, phone number, length of residence, records of property ownership, court appearances and business dealings. Some smaller outfits also have a reputation for selling personal data to people who may have no business seeing it -- everyone from private investigators to bill collectors and spurned lovers.
Critics also charge that data collectors are deceptive. Few people realize, for instance, that when they fill out a product-warranty card, the information goes to a little-known data seller called National Demographics & Lifestyles. "People fill out product cards because they want the warranty," says Marc Rotenberg, Washington director of Computer Professionals for Social Responsibility. "But they end up on the mailing lists of stereo and record companies. Was that part of the stated bargain when they filled out the card?"
For marketers, detailed consumer profiles are an unmixed blessing, making it far easier to target the households most likely to welcome their mail-order catalogs and other pitches. Direct marketers were once happy if just 1% of recipients responded to a mass mailing. A 5% response is now more common, which the marketers argue indicates that consumers are happier too. "We're matchmakers for parties with common interests," says John Cleary, president of Donnelly Marketing, one of the nation's largest list compilers. "We make sure companies don't try to sell lawn mowers to people in high-rises."