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TransUnion Announces New Debt Management Scoring Model for Industry, Consumers; Score Delivers Benefits to All - Complements New Bankruptcy Law

CHICAGO--(BUSINESS WIRE)--April 14, 2005--With the recent passage of a bill by both houses of Congress to overhaul U.S. bankruptcy laws, TransUnion, a leading global information solutions company, today announced the availability of a new score that works hand-in-hand with the new legislation. TransUnion's debt management score has the potential to change the way consumer credit counseling organizations and lenders implement and measure debt management programs and other strategies.

"The debt management score provides both efficiencies and a tailored approach for credit counseling organizations and lenders," said Mike Rosenthal, director of Debt Management Solutions for TransUnion's Analytic Decision Services (ADS) division. "But the real value comes from the solution's ability to help ensure consumers receive the credit counseling and debt management support that best meets their individual needs, further complementing the spirit and letter of the law."

TransUnion's debt management solution creates a score that credit counseling companies and lenders can use to quickly assess the need for concessions to a specific consumer, such as lower minimum payments, reduced interest rates or the removal of late penalty fees. In addition, consumers who exhibit strong indicators for rehabilitation can be candidates for temporary restructurings or a simple debt management plan through financial counseling.

The score predicts a consumer's likelihood to be placed in collections, file for bankruptcy or charge-off. By using measurable, empirically derived risk-based decisions, credit counseling organizations and lenders can structure programs that have their focus on the consumer's best interests. The solution leverages the power of TransUnion's advanced analytics capabilities and expertise in predicting consumer behavior with a combination of information from the consumer's credit report and interview data from their initial credit counseling session.

TransUnion is proactively working with the industry to develop a multi-pronged approach to debt management - this score is the critical first step. In addition to the score, TransUnion facilitated the creation of an industry-wide steering committee, comprised of executives from the largest U.S. lenders as well as debt counseling organizations and a leading university credit research center. The committee's purpose is to study and validate current trends, issues and possible solutions for future enhancements to TransUnion's debt management solutions.

For years, the only option available to the industry was a cumbersome, one-size-fits-all approach to developing consumer debt management plans. This approach created an environment that limited the ability of organizations to help high-risk clients and made it more difficult for lenders to get the best return on less risky accounts.

"We applaud TransUnion's efforts in this space," said Dr. David C. Jones, president of the Association of Independent Consumer Credit Counseling Agencies. "A solution that is pro-actively working with the industry and addressing it in parallel with the new law is an important first step. We look forward to working with TransUnion on this and future issues that directly impact our members and the vital services they provide to consumers."

According to the American Bankruptcy Institute, one of every 72.8 households in the U.S. filed for bankruptcy protection during the 12-month period that ended in March 2004. "This statistic points to a growing issue that the industry, Congress and consumer groups are actively addressing, both with legislation and information technology," said Rosenthal.

For additional information on the debt management score or any other of TransUnion's offerings, contact your local sales representative.

About TransUnion

TransUnion is a leading global information solutions company that customers trust as a business intelligence partner and commerce facilitator. TransUnion offers a broad range of financial products and services that enable customers to manage risk and capitalize on market opportunities. The company uses leading-edge technology coupled with extensive analytical capabilities to combat fraud and facilitate credit transactions between businesses and consumers across multiple markets. Founded in 1968, Chicago-based TransUnion employs 4,100 associates that support clients in 32 countries. Visit us at www.transunion.com.

Graphics and/or photographs to accompany this release can be obtained by members of the media by contacting Jason Nierman (jnierma@transunion.com) at 312-985-3059 or Cliff O'Neal (coneal@transunion.com) at 312-985-2540.

Contacts

TransUnion
Jason Nierman, 312-985-3059
jnierma@transunion.com

Legislators explore tougher rules against identity theft

Proposal would make it harder to get personal information from a variety of sources

By David Rice
JOURNAL RALEIGH BUREAU

RALEIGH - May 18, 2005 - Karen Baggett told an N.C. House committee yesterday that she first learned of her "offenses" when she got a letter from the N.C. Division of Motor Vehicles saying that her license was suspended because she didn't show up for court.

Baggett told members of the committee how a woman in Asheville used her name and left her with a criminal record of charges for possession of crack cocaine, possession of drug paraphernalia and driving while impaired.

"She told three different officers on three different occasions that she was Karen Baggett, and she knew my birth date," Baggett, 38, a nursing student and mother of two from Burlington, told the committee.

"They're still on my record as a dismissed charge," she said, adding that she must still go to court to try to get the charges erased from her record.

"They make me the victim, and then they make me clean up the mess," she said.

Baggett's story gave legislators a first-hand account of identity theft - the hijacking of personal information to commit fraud or other crimes in someone else's name - as they took up a bill to try to make identity theft harder.

"The criminals steal our information in every conceivable way," said Rep. Bruce Goforth, D-Buncombe, a lead sponsor of the bill. "The high-tech part is the Internet; the low-tech part is diving into a Dumpster to get our discards."

A Federal Trade Commission survey determined that there are nearly 10 million victims of identity theft each year in the United States. There were 300,000 of them in North Carolina last year, Goforth said.

"Individual consumers lost $5 billion in out-of-pocket expenses incurred trying to restore their good names and financial health, or $500 per victim. The typical consumer spends $800 and 175 hours over 23 months to clean up his reputation and erase $18,000 in fraudulent charges," he said.

Dan Paulson, the acting agent in charge for the U.S. Secret Service in Charlotte, told the legislators that law enforcement has considered identity theft the fastest-growing crime for several years in a row.

Even paying a bill and leaving the red flag up on your mailbox can invite trouble, he said.

"It's an enticement to a criminal, because if you're paying your credit-card bill, I have your credit-card account number, your bank-routing number and your signature," he said. "Once I have that, within 30 days I can ring up $30,000 worth of fraud on you and you don't know it."

Even the chairman of the committee that took up the bill yesterday said he is a victim of identity theft.

Rep. Ronnie Sutton, D-Robeson, the chairman of the House Judiciary III Committee, said that a worker in his law office in Lumberton used an offer for a preapproved credit card that came to the office and charged $12,000 to the card over two years.

Sutton said he learned of the abuse only when the employee got sick and officials at MasterCard called him to say he was two months behind on his payments.

"I had no idea what they were talking about," he said.

"She's probably the best employee I ever had, as far as work. But she wasn't worth an extra $12,000."

The bill would do a variety of things to try to protect personal information.

It would:

• Forbid a business to share Social Security numbers with the public, print Social Security numbers on identification cards, require that the numbers be transmitted over the Internet or disclose Social Security numbers to a third party without written consent.

• Let a victim "freeze" his or her credit report so that it can't be released without their consent.

• Require businesses that maintain personal information of residents to destroy the information properly so that it cannot be used.

• Require businesses that have a security breach to notify people whose information is released or compromised.

• Limit collection of Social Security numbers by state and local governments and require that they be kept separate from other public records. The bill would let state and local governments share Social Security numbers for government and court purposes. And it would let the news media request Social Security numbers for use in verification or research, but not for sale to the public.

"It is to make sure government doesn't collect any more information than it needs ... and that business, when they discard information, doesn't just put it in the Dumpster - they destroy it," said Josh Stein, the chief of the N.C. attorney general's consumer-protection division.

A variety of groups, including bankers, health insurers and registers of deeds, back the bill.

"The legislation that was proposed in North Carolina was far and away the broadest attack on identity theft of dozens of bills around the country," said Paul Stock of the N.C. Bankers Association.

Some businesses - especially direct marketers and credit bureaus - still raised questions about the bill yesterday.

Charles Marshall, a lobbyist for the Direct Marketers Association, questioned how businesses will know what they've lost if, say, an employee misplaces a file with 100 or 1,000 names in it.

"The real compliance issue is what happens when you don't know whose names are in those files," Marshall said. "You want to comply.... But you have no idea who to contact."

And Chantele Mack of the Consumer Data Industry Association, warned that companies sometimes exchange Social Security numbers to help find missing children or parents who don't pay child support. The Social Security numbers should be exempt from restrictions on public records, she said.

"We're disclosing information that is lawfully made available by the government," she said. "If it's lawfully made available by the government, then businesses should not be prevented from making that information available."

Sutton said that the committee will resume discussion of the bill Thursday.

• David Rice can be reached in Raleigh at (919) 833-9056 or at drice@wsjournal.com