Six States Sue TRW Over Credit-Reporting Practices
DALLAS (AP) _ Six states on Tuesday accused TRW Inc.’s giant credit agency arm of violating consumer privacy and making reporting errors that harmed the credit ratings of thousands of consumers.
The attorneys general sued TRW in state courts in Dallas and New York, saying they had received thousands of complaints against the company’s Dallas- based unit, one of the nation’s largest credit-reporting agencies.
TRW denied the allegations and filed countersuits in federal courts in both cities, saying that the federal Fair Credit Reporting Act supersedes state law.
TRW gathers personal and financial information on more than 170 million consumers. Subscribers such as banks, retailers and landlords pay for the information to make decisions about extending credit.
″Our records indicate that as many as one out of every three credit reports contain some kind of inaccuracy and one out of six contain a serious inaccuracy,″ said Ed Barbini, a spokesman for the New York Attorney General’s office, which filed suit in state court in Manhattan.
In the lawsuit filed in Dallas, Alabama, California, Idaho, Michigan and Texas accused TRW of failing to correct inaccurate information in credit reports.
The states alleged TRW sometimes combined the credit histories of people with similar names, even mixing up consumers in their 20s with some in their 70s, and that such inaccuracies are hard to correct.
″TRW has shown an arbitrary and callous disregard for how its actions have hurt many families,″ Texas Attorney General Dan Morales said.
The suits seek to halt any illegal activity and unspecified civil penalties, damages and attorneys’ costs.
TRW denied the allegations and said in a statement: ″As a matter of principle and policy, TRW provides consumers with disclosures and privacy protections far beyond what the law requires.″
TRW has repeatedly denied similar charges against its Credit Data Division based in Orange, Calif., which provides reports that often determine whether consumers can get credit from car dealers, department stores and others. The division’s consumer assistance center is located in Dallas.
The company maintains that its error rate is less than 2 percent and that its credit-reporting system is effective in giving people quick access to their credit records.
The Dallas lawsuit also contends that TRW failed to perform adequate investigations when consumers dispute the accuracy of items appearing in its credit reports. It alleges TRW deleted disputed negative items from consumers’ credit reports but let them reappear without telling the consumers.
The lawsuits came after a Consumers Union report two months ago that nearly half of the credit records it studied from the nation’s largest credit bureaus contained some inaccuracies.