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Jeremy Simon

TransUnion settlement details emerge

See more recent story: Deadline passed for free TransUnion credit monitoring 

Further details have emerged about what consumers stand to gain from the settlement of a class action lawsuit against credit reporting giant TransUnion.

The details revolve around the words "millions" and "billions."

As many as 190 million consumers stand to gain free credit monitoring due to the tentative settlement, first reported by CreditCards.com Thursday.

In addition, TransUnion has to fork over $75 million to settle the case.

It could have been worse, according to the lawyers for the consumers, who first sued in 1999 to stop TransUnion from selling too much information about them. They were after as much as $190 billion in damages.

On May 29, after the accumulation of many years in court and many thousands of pages of documents, the tentative settlement of that class action lawsuit was announced, giving a majority of Americans free round-the-clock access to their credit reports and credit scores. Additionally, consumers would receive e-mails updating them about any significant changes to their credit files, such as late payments or accounts opened in their names.

"We are very pleased with the settlement and believe it is an excellent result for the class," says Chris Micheletti, a lawyer with Zelle, Hofmann, Voelbel, Mason & Gette, LLP and attorney for some of the plaintiffs. "We are gratified that we were able to negotiate such a beneficial settlement package for the class members after so many years of hard-fought litigation and given the significant and challenging legal issues presented by the case."

While the settlement may provide satisfaction for millions of borrowers, they will have to be patient -- registration at the settlement Web site doesn't begin until June 16.

$75 million settlement fund
The settlement will cost TransUnion a minimum of $75 million. That's the size of the "settlement fund" it is required to create through an escrow fund.

In addition to getting free credit monitoring, consumers can claim a portion of that money by registering on the soon-to-be-created Web site at listclassaction.com.

The cash value -- payable after two years -- may not amount to much.

First, $6 million is going immediately to "expenses of the notice administrator and the claims administrator." The court reserved to itself to determine how much will go to consumers' lawyers, but TransUnion agreed not to squawk if lawyers' fees don't exceed 25 percent of the fund -- $18.75 million. Each named plaintiff will get up to $3,750 from the settlement to compensate them for their time, "including their attendance at hearings, sitting for depositions and consultation with counsel."

That would leave somewhere around $40 million -- to be divided among as many as 190 million Americans. Don't spend all your 21 cents.

'Full disgorgement'
Even if the average consumer stands to gain less than two bits, it's certainly no two-bit settlement to TransUnion. The settlement fund "represents full disgorgement of TransUnion's relevant profits," according to the settlement document.

Beginning in 1999, the company was accused in 14 different lawsuits of violating the Fair Credit Reporting Act by disclosing more information about consumers than the law allows to marketers of insurance and credit products.

The chief benefit of the settlement -- free credit score monitoring -- goes to those who use the Internet. Like a cable TV service, the credit monitoring service will have two levels -- basic and enhanced. However, unlike cable service, it will be free.

From the settlement:

Basic relief
"TransUnion shall provide six months of the TransUnion credit monitoring service (which consists of (i) free unlimited daily access to a Settlement Class Member's TransUnion credit report and Credit Score; (ii) 'credit monitoring,' a 24hour e-mail credit notification service (with certain other components customarily provided by TransUnion with sale of this product) having a retail value of $59.75, to all class members who request it."

Enhanced relief
"Simultaneously with offering settlement class members the basic relief ... TransUnion shall offer an alternative enhanced set of services that class members can select in exchange for a full release of claims. This enhanced set of services shall consist of nine months of TransUnion credit monitoring, a suite of insurance scores, and TransUnion's mortgage simulator service, having an aggregate retail value of $115.50."

To get the basic, six-month monitoring, consumers have to promise not to join another post-settlement class action lawsuit. For the nine-month enhanced free service, consumers have to give up all their rights to make further legal claims against TransUnion.

Many free trials turn automatically into a paid service unless consumers remember to shut them off. This one won't. After the free period expires, the service will be discontinued automatically. In addition, you won't have to put up a credit card number to get the service.

The settlement cost to TransUnion could have been much worse: The consumers' lawyers were estimating that TransUnion could have been hit with a penalty of $100 to $1,000 for each person affected. With an estimated 190 million people affected, TransUnion was exposed to damages of $19 billion to $190 billion, they argued.

Still unfolding is how this settlement will affect others that sell credit score monitoring services. When one of the industry's giants is giving it away, how can others in the field -- such as Experian, Equifax and freecreditreports.com -- hope to sell it? This settlement must have hit them, as the jingle for freecreditreports' TV ad says, "like an atom bomb."

Even for free, credit monitoring may be worth little more than the price tag, says personal finance columnist and author of "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life" Liz Pulliam Weston. "Credit monitoring has limited value for the typical consumer who isn't in the market for a major loan and isn't at high risk of becoming a victim of serious identity theft" such as the fraudulent opening of new accounts in their name, Weston says. "Credit card fraud, where someone steals your card or your account number, is usually no big deal and doesn't warrant credit monitoring."

"Credit monitoring doesn't prevent identity theft but can give you early warning that there's a problem, which can help you get started on clearing your name," Weston says. 

See related: Lawsuit settlement provides free credit monitoring to millions of consumers, TransUnion settlement sign-up period begins       

23 Comment(s)

jack dorgan said:

i cannot get a preferred auto insurance rate because of my fanthom credit rating.
mortgaged 3 homes. never late payment, never missed a payment.
financed nunerous autos. never late payment, never missed a payment.
no tickets no accidents over 30 years
paid cash for current home. valued at 80,000 plus.
developed lot in citrus springs, $30,000 plus
auto paid off
stock and bonds, $30,000 plus

so why cant i get a preferred insurance rate on my auto and homeowners?


Michael said:

Jack, what you might not know, may surprise you, and hopefully, will engage you. Firstly, the insurance industry can, and does legally discriminate in all 50 states in the course of doing business. Think; "women drivers," teens, and the elderly. OK, perhaps you are not of this "persuasion." Think about this - Has a credit card company or bank recently arbitrarily, and legally, lowered your credit limit or available line of home equity, regardless of your payment habits? If so, your credit score will be lowered, and if you think your insurance carrier will take this into consideration, think again. welcome to the "credit crunch."


morris bell said:

where do i sign up, please let me know!


Jeremy Simon Author Profile Page said:

Morris,

You can sign up here:

https://www.listclassaction.com/claim/

-Jeremy


Kathy Vallee said:

I just saw the add on tv for this action 7-27 2010 and did not know about it before how can it be to late to sign up when it is saying you can still do so.


T.L. MIller said:

I saw the TV notice today for the first time. I have had credit in my name for nearly 40 years and certainly through the period of this action. I'd also like to know why I am excluded.


william fields said:

I agree with Kathy Vallee on the statement she said.


Jeremy Simon Author Profile Page said:

Kathy and T.L. -- The deadline for sign-up ended back in '08.

However, I haven't seen the TV ad you both mention. Can you tell me a little more about it?

-Jeremy


JOHNNIE HOWARD said:

HOW DO I APPLY FOR THE SETTLEMENT WHERE DO I START


Sarrah Jane Bennett said:

I saw the TV notice last night for the first time. I have had credit in my name during the time period indicated on the advertizement. I'd like to know if I have excluded?


John Neil said:

I just saw the TV ad last night for the first time, 08/04/2010. It talked about if you have had any type loans since like 1985. I've had mortgage loans, car loans, student loans, and credit cards. I even had to file bankruptcy in like 1997 because of the credit cards.

I do not recall seeing anything about this settlement or class action until last night.


Teresa said:

I just seen the ad myself on TV. It is from "Transunion Settlement Fund" If you look it up on line the URL is www.transunionsettlement.com/file-a-claim
But I think it may be a scam. I can find no other information except that the deadline is past. And if you read the fine print of this site it says that by signing the form, you authorize some lawyer to keep 47% to 100% of any moneys collected. Very confusing!


sandra wade said:

I saw the TV ad yesterday; however, when I tried to sign up the deadline had ended. How can this be when the ad said to go online and sign up?


Stephanie said:

The website is www.tuclaim.com it was on TV here last night.


Deloris Keels said:

Has the TransUnion Corp. Case # 000V4729 settlement been paid out? I am awaiting my cash whatever it may be. I do not need the free monitoring from TransUnion. I mailed my claim on 9-5, 2008.

I decline the option to take free credit monitoring.

Please tell me if the case has been settled and how I can receive my part.

Thank you


Peggy U said:

got a letter in the mail today saying just need to sign and send back will receive $300.00. Anyone know if this is true???


Pam said:

From everything I've read and seen, the settlements were for $423 per person, lawyers get 45% leaving you with somewhere around $200 for your trouble. I sent in my return by e-mail and received a letter today about it also.


Melissa said:

I got a letter today from the firm prosecuting Tran Union, stating that my cash offer was $443, the same for everyone, the lawyers fees are 45% plus 3\$50 filing fees after that all qualified clients in this case will receive about $200.
That's $200 I didn't have, but the lawyers sure are getting rich from it. 45% is kinda high, the original agreement I thought said $25%.


michelle said:

I got a letter today from the firm prosecuting Tran Union, stating that my cash offer was $443, the same for everyone, the lawyers fees are 45% plus 3\$50 filing fees after that all qualified clients in this case will receive about $200.
That's $200 I didn't have, but the lawyers sure are getting rich from it. 45% i agree it is misleading and high, the original agreement I thought said 25%


D.L.Marshall said:

how do i sign up for my settlement?


chiefsquirrel said:

I have also received the same settlement notice. I am also confused about the fees and I think they're exhorbitant.
Doing some checking on the web there was a second class action brought to address/re-apportion the fees. The fees were separate from and in addition to the actual settlement of $75M.
http://www.strasburger.com/fcrablog/template_permalink.asp?id=355

I'm not sure whether to accept this settlement and lose 56.5%.


Guest said:

Well still have not received an email. If I don't get any money I will sure for misleading information on credit report. They had everything on my credit report wrong and it has messed up my credit report. If they are going to put stuff on the report they need to have the information correct. It is not right messing up peoples credit.

Tammie


Stephanie said:

I took part in this, and I haven't heard or received any further information since I sent in my paperwork. I think it was all a big attorney scam, and now you can't find any information on how to talk to a live person in regards to any of it!


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