TransUnion Complicates ID Theft, Class Says

CHICAGO (CN) - Credit-reporting giant TransUnion charges $10 before it places security freezes on the files of people dealing with identity theft, a class claims in Federal Court.

Jon Niermann, the lead plaintiff in the March 18 action, says he learned about TransUnion's "illegal" policy after he became a victim of identity theft.

After someone opened a Wells Fargo credit card account in the Austin, Texas-based man's name on April 24, 2014, Niermann closed the account before any charges were made, notified the police, and contacted the major credit agencies.

Niermann says he wanted security notices on his account to "prevent unauthorized persons from opening any new credit in Mr. Niermann's name."

"Experian promptly complied with his request," the complaint states. "TransUnion, however, did not comply with his request, but instead mailed a form letter requiring that he pay a $10.00 charge before TransUnion would place the security freeze on his file."

Niermann says he sent TransUnion six separate requests to place a freeze on his account, but each time it refused unless he first paid $10.

He notes that Texas law "allows CRAs to charge a 'reasonable fee,' not to exceed $10.00, for placing a security freeze, [but] does not make the CRAs' duty to place the security freeze within five business days conditional on the payment of the charge, nor does it allow CRAs to delay placing the security freeze until after the charge is paid," the complaint states, abbreviating credit-reporting agencies.

The law of Texas and other states also exempts victims of identity theft who provide a police report from paying a fee to either place, temporarily life or remove security freezes, according to the complaint.

Niermann, who names the company as Trans Union in his complaint, says the defendant refused to place a freeze on his file for six weeks until he contacted the credit agency's outside counsel and explained the situation.

After immediately placing a freeze on his file, TransUnion excused its delay by claiming that the standard form police report Niermann submitted was not generally accepted as a valid police report.

Niermann says that "TransUnion's repeated form letters show that TransUnion has a policy and practice of unlawfully charging consumers a fee or requiring them to provide a police report, investigative report, or complaint involving the alleged commission of an identity theft offense as a pre-condition to placing a security freeze," in violation of the Texas law.

Delaware-based TransUnion operates its main offices in Chicago, where Niermann filed the federal complaint.

He seeks punitive damages on behalf of a class including all individuals who sought a credit freeze on their file, in addition to a subclass of identity theft victims, for violations of the Texas Consumer Credit Reporting Act.

The class is represented by Michael Caddell with Caddell & Chapman in Houston.

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