SUITLAND, Md. -- Andrews Federal Credit Union filed a $15 million lawsuit against Cleveland-based TRW Inc., claiming the vendor used a faulty program to gauge the creditworthiness of borrowers.
The Suitland-based credit union argues in a suit filed this month in the circuit court for Prince George's County, Md., that the credit reporting company breached its contract by failing to adequately test the service.
As a result, the $450 million-asset credit union offered about 15,000 loans to people who were "poor credit risks" in 1992, an Andrews official said.
"We contracted with them [TRW officials] to provide credit checks. They failed to meet the specifications of the contract," said Robert Binford, senior vice president of the institution.
Damage Termed Slight
A TRW official rebutted the claims, saying Andrews is exaggerating the extent of the damages.
"We researched to the limits of the information available to us and can only identify a handful of consumers causing a loss for Andrews," said Janis Lamar, a TRW spokeswoman.
Ms. Lamar said the service, known as "Quest" is sound. She said errors turned up because of a TRW computer programmer who input the data.
Ms. Lamar said TRW has offered Quest for 10 years without a complaint.
The credit union sent out preapproved loan applications in the fall of 1992 as a promotion. About 3,000 people who had been denied credit or offered limited credit by Andrews received loans. The credit union became aware of the problem last January, Mr. Binford said.
