DR. ROBERT NYE DIDN’T LEAVE HOME WITHOUT IT-HE JUST couldn’t use it. The first hint of trouble came when the retired physician and former Dartmouth professor tried to buy a $7 ice tray at Sears with his American Express card, only to be refused because of a “derogatory credit rating.” That was just the start. Last summer Nye, who lives in Norwich, Vt., left for a vacation in Alaska and Scotland. Unable to untangle his credit problem, he used traveler’s checks wherever he went.
Puzzled and a bit steamed, Nye returned to Norwich, a prosperous town of 3,000 people, to discover that he wasn’t the only resident who couldn’t say, “Charge it!” Norwich had become the town without credit. Residents were being turned down for mortgages and loans. Their credit cards were causing indigestion in restaurants and embarrassing moments in department stores.
Finally, Town Clerk Karen Porter, 44, figured out what was going on. A credit researcher for a company hired by TRW, the giant credit-reporting company, had visited the town clerk’s office in July to look through records. The researcher, who worked part-time for Atlanta-based National Data Retrieval Inc., made a crucial mistake: Instead of tax delinquencies, she had copied, from handwritten records, the names of 1,400 Norwich residents who had paid their property taxes on time—and erroneously listed them as deadbeats. Says Porter: “She was looking in the wrong place.”
As Porter began trying to right the wrong, she called several of TRW’s offices and was promised that someone would call back. But no one did. It wasn’t until two local newspapers wrote about the situation, two weeks after the trouble had started, that TRW took action, expunging the negative ratings. As a result of mounting consumer complaints about erroneously recorded credit ratings, TRW fired National Data Retrieval and announced last month that rather than having to pay a $20 fee, all consumers would be able to get free copies of their credit histories (by writing to: TRW Marketing Services Div. Att. Mail Reference, 600 City Parkway West, Orange, Calif. 92608). TRW is still facing lawsuits by 15 states, including Vermont.
Karen Porter, who testified before a Senate subcommittee in Washington, D.C., last month, says, “There ought to be laws on these things. The frightening thing is the sloppy way this data is collected—and the dramatic impact one mistake can have on a person’s life.”