The competing credit reporting companies are rallying to cooperate on a host of measures aimed at keeping their information secure from fraud.

Incidents like last week's Autoland scandal in New Jersey have heightened concerns about the security of the financial histories kept by the major credit bureaus.

Fifteen of the Newark auto dealer's employees were arrested for illegally accessing the credit reports of hundreds of people nationwide - most if not all of whom had never even visited Autoland - and using that information fraudulently to gain cash and credit lines.

Secret Service Role

U.S. Secret Service officials are still trying to sort out how many millions of dollars were stolen in the scam.

The largest credit bureaus - Equifax, Trans Union, , and TRW - had been well aware of fraud possibilities long before the Autoland problem came to light in a sting operation, and started taking cooperative steps about six months ago.

Under the auspices of their umbrella group, Associated Credit Bureaus, they organized a security and fraud task force in June to explore new measures to combat the problem.

The group, comprised of representatives from the three companies and their affiliates as well as a liaison from Associated Credit Bureaus, has been looking toward defining standards and practices to unify and protect information security.

The credit bureaus have already started to implement one of their decisions - to suppress account numbers from more "vulnerable" credit grantors, such as auto dealers.

Dealers tend to be vulnerable to the illegitimate use of credit reports because of their high turnover of employees, said Janis Lamar, director of external communications for TRW. And because most dealers get involved in applications for credit, they seem to give many people access to buyers' personal data.

Autoland Takes Action

In the case of Autoland, 15 employees had access to credit reports - a number that has been reduced to two since the incident.

According to Barry Connelly, executive vice president of Associated Credit Bureaus in Washington, car dealers generally do not handle financing themselves, and therefore do not need access to individual account numbers on revolving accounts. But he added that simply removing the account numbers from credit reports would not necessarily prevent what happened at Autoland.

Striking a Balance

Meanwhile, the credit bureaus are seeking to strike a balance between security and customer service.

"We are torn by a need to provide fast and easy access to those with a legitimate need, we don't want it to become cumbersome and difficult," Mr. Connelly said.

The task force and the individual credit bureaus have been looking into implementing more advanced software and hardware, exchanging information about possible frauds, and formally referring those cases to the Secret Service.

Organized Crime Involved

The task force has been working closely with the Secret Service to deal with potential criminal activity. Although the Computer Fraud and Abuse Act of 1984 originally gave this agency authority over financial and computer crimes, credit bureau industry officials said the Secret Service had stepped up its investigations in these areas mostly in the past year.

"There is the realization, about financial crimes, that these people are organized criminals focusing on this kind of activity," said Tom Baker, the director of access security for Equifax Inc. and a member of the task force.

Ray T. Crescenzo, the Associated Credit Bureaus' liaison to the fraud and security task force, said the credit bureaus and the Secret Service began to work more closely as the result of a meeting in April.

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