Heightened concerns about privacy may well have played a role in a recent court judgment against Trans Union Corp., which was ordered to stop selling direct marketing lists, experts said.

Trans Union's six-year battle with the Federal Trade Commission came to a head Aug. 26, when a federal judge ruled the sales of the lists violated the Fair Credit Reporting Act. The lists include information about consumers' loans-auto, mortgage, credit card-and income.

This month Trans Union-which derives 10% of revenue from list sales- filed a notice with the FTC that it will appeal the ruling by Oct. 28.

The decision comes amid heightened sensitivity about companies' use of consumer information, privacy experts said.

"If this ruling had come out a couple of years ago, it might have been different," said Beth Givens of the Privacy Rights Clearinghouse, a consumer advocacy organization in San Diego. "I feel quite certain that the increased activity by federal agencies and members of Congress might have played out in this decision."

Earlier in the conflict, it seemed Trans Union had the upper hand. In 1996 the U.S. Court of Appeals for the District of Columbia said the FTC did not have enough facts to support its case.

Today the FTC seems to have a stronger position, both legally and within the public sector.

Under Administrative Law Judge James P. Timony's decision, Trans Union could incur severe penalties-up to $2,500 for each name-if it continues to sell direct marketing lists, said David Medine, the FTC's associate director for credit practices.

Mr. Medine said the legal victory gives his agency new power to combat buying and selling such lists.

Of the three big credit bureaus, only Trans Union is in this line of business, but at least one other company wants to be.

The FTC is responsible for overseeing credit bureaus by enforcing the Fair Credit Reporting Act, legislation that governs how credit bureaus may use the personal data they collect about consumers.

The federal agency has been arguing that Trans Union may not sell data from its consumer credit reports to companies that do not have a permissible purpose to view a report.

Under the Fair Credit Reporting Act, a permissible purpose is when consumers authorize a company to look at their credit report, because, for example, they are applying for a loan.

Companies may also use credit bureau data to prescreen consumers for solicitations of credit or insurance.

Trans Union, however, has been selling lists of consumers to companies like catalogue, magazine, video, and sweepstakes marketers.

Some banks buy these lists as well. In 1993, according to court papers, Citibank bought these lists to market home equity loans. Under the law, a bank may use the lists for this purpose. But it cannot use them to solicit a checking account, for example, because it is not an offer of credit, Mr. Medine said.

In September 1997, Congress amended the Fair Credit Reporting Act, enabling the FTC to assess companies with penalties for "knowingly" violating the law. Before, the FTC could only order a company to stop doing something.

Judge Timony "has clearly ruled that these are credit reports and that Trans Union proceeds at its own risk if it continues to sell them," Mr. Medine said.

Oscar Marquis, Trans Union's general counsel, said Judge Timony's decision does not change the Chicago-based company's position. He said the FTC could have brought enforcement action against Trans Union before the judge's ruling but did not do so. In the meantime, Trans Union continues to sell the marketing lists.

Mr. Medine said it is unlikely the FTC would bring enforcement action against Trans Union before a decision is made on the company's appeal, probably early next year.

Mr. Medine said the FTC's case against Trans Union is stronger now, because Judge Timony established that these lists constitute a credit report and, therefore, Trans Union is "knowingly" violating the Fair Credit Reporting Act.

Customers who buy these lists from Trans Union could also be fined up to $2,500 a name, Mr. Medine said.

Trans Union clearly takes the FTC's new powers seriously. The day after the act was amended last year, Trans Union stopped selling some lists that were considered particularly sensitive.

For example, Trans Union stopped including information about when consumers opened a loan or the outstanding amount on a mortgage.

Trans Union's competitors have taken notice of the controversy. Equifax Inc. left this business voluntarily in 1991 to stave off regulatory action.

Experian Inc. signed a consent agreement in 1993 with the FTC, pledging not to sell this information.

Last year, partly because of Trans Union's perceived legal success, Experian tried to get out of this agreement through a motion in a federal court in Dallas. The court told Experian to wait until the resolution of the Trans Union case.

All three credit bureaus, however, sell identifying information derived from credit reports, such as a person's name, address, mother's maiden name, birth date, and Social Security number.

Consumer privacy advocates were disappointed that Judge Timony didn't go a step further, to "close the loophole in the FCRA" that allows credit bureaus to sell this information for marketing purposes, said Jon Golinger, program director of the California Public Interest Research Group.

The judge's decision is "a good, modest victory for privacy," Mr. Golinger said.

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