Trw Settles Credit-Reporting Lawsuit With FTC

DALLAS - TRW Inc. has settled a lawsuit with 19 states and the Federal Trade Commission, which accused the company's credit-reporting unit of violating consumer privacy and making reporting errors that harmed the credit ratings of thousands of consumers.

The settlement requires Cleveland-based TRW to make sweeping changes in its credit-reporting business, including providing reports to consumers who ask within four days.

The consent agreement also calls for TRW to do the following:

-- Adopt procedures to prevent mixed-file errors, such as those where reports of a father and son, or individuals with similar names become intermingled.

-- Reinvestigate information disputed by a consumer in his report within 30 days. If TRW cannot verify the information in 30 days, it must be deleted.

-- Establish a five-year monitoring system to determine how well its other new procedures are working.

Documents executing the settlement were filed today and approved by a U.S. District judge in Dallas.

The settlement comes against a background of growing consumer anger over the enormous power of credit-reporting companies, which keep financial dossiers on tens of millions of Americans.

The lawsuit was filed last July in Dallas, where the company's customer-assistance center is located. It alleged that TRW had failed to maintain procedures to ensure accuracy of credit reports.

TRW also agreed to establish a toll-free number for consumer inquiries, investigate information disputed by consumers and check public records if necessary to verify information.

TRW also agreed to disclose to consumers their individual credit scores, starting Dec. 31, 1992.