Suit Says TRW Credit Division Fixed Prices

An independent credit bureau in Oregon has filed suit against TRW Inc., charging that the company’s Orange-based credit reporting division engaged in price fixing and anti-competitive practices.

National Information Services Inc. of Tualatin, Ore., alleges that TRW and the largest national broker of its credit information, Credit Bureau Reports Inc. of Houston, acted in concert to eliminate competition and monopolize the market for their credit network services.

Susan Murdy, a spokeswoman for TRW Credit Data Services in Orange, said the company has a policy of refusing to comment on pending lawsuits.

National is one of hundreds of smaller credit bureaus that are affiliated with a major bureau like TRW, just as an independent insurance company sells policies on behalf of a number of large insurers.

Robert Wickizer, who founded National last year, said he tried to offer TRW credit reports for lenders, merchants and other credit grantors at deep discounts over the prices offered by a TRW-owned branch office.

But, the lawsuit alleges, TRW tried to insulate itself from competition by imposing surcharges as high as 100% on National and any affiliate that offers lower prices or better service than its own company-owned offices. TRW allegedly told the affiliates that it wanted to reduce competition so that it could raise prices.

“TRW is gouging the public with very high prices,” said Eugene Crew, a San Francisco attorney who filed the case for National.

Credit Bureau Reports, TRW’s largest national broker, also increased its surcharges by more than 100% to try to dissuade any of its customers from leaving for a competing bureau that offered lower prices.

The lawsuit estimates that through monopoly control of some credit bureau markets, TRW may reap more than $1 billion in overcharges over the next three years before the case comes to trial--costs that are passed on to consumers. The suit was filed Aug. 24 in U.S. District Court in Oregon.

TRW, the Cleveland-based aerospace and credit reporting giant, is one of three companies that keep national, computerized records on every consumer who holds a credit card. The company says it maintains credit files on about 170 million Americans.

TRW started the surcharges in 1984, using the additional revenue to help finance its $325-million acquisition of the Chilton Corp. of Dallas, the nation’s fourth-largest credit bureau, according to the lawsuit.

When National tried to solicit new customers for credit reports despite the TRW sanctions, TRW assertedly responded by making the penalties higher and eventually refusing to provide service to any customer obtained by the independent bureau.

“There are a lot of people who would like to deal with us, but they won’t because TRW has refused to issue numbers through us,” Wickizer said. “It’s a cost-price squeeze to get us out of the market entirely.”