PerformanceData to Eliminate Products in Response to New Law
Jeff Hellinga, general manager at PerformanceData, said the company will stop taking orders for its MasterFile and MasterFile Solo products on Nov. 12. These products offer individual and household-level information, sourced from credit files. As a result, they will not be allowed to be sold under the Financial Services Modernization Act of 1999, which was passed last year and will go into effect Nov. 12.
The Federal Trade Commission has given companies like PerformanceData and other credit bureaus and financial institutions until July 2001 to comply with the act.
While the law essentially reverses previous legislation preventing banks, insurance companies and securities firms from entering each others' businesses and allows banks to freely share information about their customers within the various divisions of any new conglomerates, it also prevents banks from sharing credit card account numbers and access codes with third parties, which some groups, including the DMA, oppose.
"Individual and household-level data sourced from credit falls under [the FSMA's] definition of what's considered private, personal financial information," Hellinga said.
PerformanceData also will continue to offer its aggregated credit products, including Sum-it and Sum-it Plus, through July 2001. These products offer spending behavior information on blocks of five to nine households.
"This data is sourced from credit files, but it is not attached to an individual," Hellinga said. "It just says that a certain ZIP code has certain financial characteristics attached to it."
Hellinga also said that it "is unclear as to what the FTC's interpretation is of summarized credit because it is not tied to an individual."
PerformanceData has filed litigation against the FTC to get clarification.
"We are going through litigation, and hopefully between now and July we will get an injunction -- temporary or permanent -- to let us continue," said Hellinga. "But that's why we are saying right now we'll go through July, and hopefully we'll get some clarification if we can continue or if we have to stop in July."
PerformanceData also will package and release new analytic offerings in mid-2001 that comply with the law.
As a result of these developments the company will be in full compliance, Hellinga said.