Reacting to a rash of credit card fraud cases involving car dealerships, TRW Information Services said it will limit the information it provides to car dealers, effective Saturday.
Atlanta-based Equifax Inc., another major credit information provider, said it also is suppressing certain sensitive information about consumers, such as credit card account numbers, from reports given to car dealers. At Equifax, however, the information is being withheld only in the Atlanta area as part of a marketing test.
Bloomberg Business News service quoted Janice Lamar, a spokeswoman for Orange-based TRW, as saying the company decided to limit the information made available to car dealers after receiving evidence that some information was being used to commit fraud. TRW also plans to keep account numbers out of reports obtained by employers, who often check the credit ratings of job-seekers.
“They have absolutely no need, in our opinion, to know that information,” Lamar said.
TRW’s action comes three weeks after federal authorities broke up a ring of 15 car salesmen at the Autoland dealership in Springfield, N.J., after they allegedly used information obtained from credit bureaus to run up large charges on the accounts of unsuspecting victims.
Lawsuits filed in federal courts around the country indicate that other car dealerships have been the source of similar scams. Florida car salesman Steve Shaw, for example, was jailed in 1992 for running up more than $100,000 in charges on the accounts of at least 20 other men named Steve Shaw, whose credit information he obtained from credit bureau computer terminals.
Car dealerships, like other businesses that process loan applications, often subscribe to one or more of the three major credit bureaus to check the credit ratings of customers seeking loans. Consumer activists and others have complained that salespeople at car dealerships make a large number of unauthorized credit report requests, either to screen customers to see if they can afford a car or to commit outright fraud.
Norm Magnuson, spokesman for Associated Credit Bureaus, a Washington trade group, acknowledged that car dealers present a special security risk.
“That has been a problem,” Magnuson said. “Our position is that reports should only be pulled when a customer actually wants to purchase a car.”
Southland car dealers said they don’t think the changes will hinder their deals or their ability to help customers obtain loans.
Kevin Roberts, general manager of Moreno Valley Honda, Nissan & Hyundai, said car dealers need potential customers’ credit records. But, he added, “I don’t think the actual credit card number is that much a problem.”
TRW’s Lamar said the company is taking a competitive risk by unilaterally limiting the information available to car dealers.
“Somebody may buy their credit reports elsewhere because they contain more information,” Lamar said.
Equifax spokesman Dave Mooney said that is the reason Equifax is testing its program in Atlanta.
Mooney said he does not know how long the market test will last.