Bill would make fraud-detection available for TARP

Technology the credit card industry uses to detect fraud could be applied to the Troubled Asset Relief Program, according to an expert who helped draft a House bill that calls for the use of such technology.

Credit card companies can call you up as soon as a suspcious transaction takes place and ask whether you really made it, because they use software tools that detect activity that doesn't match your normal behavior, said Stephen Horne, vice president of master data management and integration services at Dow Jones.

Similar technology could alert federal government officials about fraudulent spending under TARP, Horne said today.

Reps. Carolyn Maloney (D-NY) and Peter King (R-NY) introduced the bill, H.R. 1242, earlier this year. It is currently in the House Financial Services Committee. It has 40 cosponsors representing both parties, Horne said. Lawmakers have introduced other bills to increase TARP oversight as well.

The bill is only for TARP spending, but it could be a model for transparency in other areas such as Medicare, entitlements and other financial areas, Horne said.

Dow Jones has advised members of Congress about the technology and how it can be applied, Horne said.

H.R. 1242 would require the Treasury Department to create a centralized, Web-accessible public database system that has a standardized format so that TARP funds are easily visible and traceable, according to a description on Maloney's Web site.

Treasury would be required to combine the reported government data with data that are collected by independent sources including corporate press releases, news articles, indexes, corporate profiles, and other non-government financial information, according to Maloney.