TRW, 19 States Reach Pact On Credit Data Accuracy

NEW YORK - TRW Inc. has reached an agreement with New York and 18 other states to modify the way it gathers information, with the aim of preventing mistakes in consumer credit files.

New York Attorney General Robert Abrams said on Tuesday that the agreement settled hundreds of complaints from New Yorkers that TRW's credit reports are full of errors and that attempts to correct them have been ignored.

The same agreement has been entered into by the Federal Trade Commission and the states, and they have filed their consent orders in U.S. district court in Dallas, Mr. Abrams said.

|Partnership with Consumers'

D. Van Skilling, a TRW executive vice president, said the company is pleased with the settlement.

The provisions "encompass processes and procedures that we already have in place or that have been planned for some time," he said. "This agreement furthers our objective of creating a partnership with consumers and credit grantors in credit reporting."

A task force of the 19 states was investigating the business practices of Cleveland-based TRW and the two other large firms in the credit reporting field - Equifax Inc. and Trans Union Corp., Mr. Abrams reported.

TRW's main error was placing the credit information of one person in the file of another, he said. The practice will be corrected by a system that uses full identification of a consumer, including first and last names, middle initial, street address and ZIP code, date of birth, and Social Security number, before a credit report is issued.

"As a consequence of errors made in the past, many New Yorkers have been unfairly denied home mortgages, loans, auto financing, and credit cards," Mr. Abrams said. "This settlement will compel TRW to maintain reasonable procedures to prevent such inaccuracies from occurring."

Credit Scores Available

Under the settlement, TRW is also required to give consumers their credit risk score at no charge and an explanation of how the score was derived. Credit reports to consumers will be issued in "plain, easily understood" language, Mr. Abrams said, noting that TRW's present credit reports are "virtually incomprehensible," using 170 different codes, symbols, and abbreviations.

He said another problem addressed by the settlement was TRW's practice of reinserting information into credit reports that was previously deleted because it could not be verified, a violation of both state and federal law. TRW will now be required to block the reappearance of inaccurate information.

The agreement required TRW to complete its investigations of disputed information in its reports within 30 days and to promptly advise consumers of the results of its reinvestigation. TRW must furnish consumers with a copy of their credit reports within four days of a request and establish toll-free telephone access to TRW's consumer assistance personnel, Mr. Abrams said.

The states included in the agreement, in addition to New York, are Alabama, Arkansas, California, Connecticut, Delaware, Florida, Idaho, Illinois, Louisiana, Michigan, Missouri, Nevada, New Hampshire, New Mexico, Ohio, Pennsylvania, Rhodes Island, and Texas.

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