Free credit reports: not so free

[alienlovechild 75]

NEW YORK (CNNMoney.com) -- For years, catchy advertisements have convinced viewers that if they don't log on to a Web site offering a free credit report, they could end up living in their parents' basement or working at a seafood restaurant.

But starting Friday, those Web sites will have a new message for their customers.

As part of the new CARD Act of 2009, companies advertising free credit reports are now required to clearly disclose that what's being marketed isn't the free credit report you're entitled to receive by law.

The Federal Trade Commission provides consumers with one free credit report a year from each of the major reporting agencies, Equifax, Experian and Transunion. Consumers can access their free report by going to AnnualCreditReport.com. But other sites that claim to offer free credit reports often come with strings attached.

Companies like FreeScore.com, CreditReport.com and, of course, the ubiquitous FreeCreditReport.com, famous for its catchy jingles and pirate hat-wearing pitchman, are not part of the government mandate and have been accused of deceptively charging consumers for unwanted services such as credit monitoring products once they sign up for their free credit report.

"Consumers will think they're getting a report under the law, but will unknowingly get credit monitoring and other services they didn't ask for and then be charged fees for them," said Tiffany George, an attorney in FTC's division of privacy and identity protection.

"[These sites] will typically ask for your credit card information as part of the process, so when you thought you were completing the transaction for a free report, you were actually enrolling in another service."

According to the FTC, Web sites are now required to include this message across the top of any page mentioning free credit reports: "THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV. You have the right to a free credit report from AnnualCreditReport.com or 877-322-8228, the ONLY authorized source under federal law."

The FTC received more than 1,000 complaints from consumers who signed up for free credit reports. Many of them had no idea they were paying for an additional service until the charges showed up on their credit card bills.

And with most of these companies charging around $15 a month for credit monitoring services, "if you don't notice [the charges] initially and months go by before you do notice them, the fees will really add up," said George.

Companies advertising free credit reports usually give consumers a certain amount of time to opt out of an additional service before automatically charging them.

"Comments from most people indicated that they didn't know that they had signed up for the service in the first place, so they didn't even know there was a period of time in which they could opt out," said George.

As a result of the new disclosure laws, many companies are moving away from offering free credit reports, and are instead advertising free trials, free scores or inexpensive -- but not free -- reports.

Experian's FreeCreditReport.com has already removed its guarantee of a free credit report. A notice on the site's homepage explains that the company is no longer able to provide free reports "due to federally imposed restrictions" and will now charge consumers $1, but will donate the proceeds to charity.

The new disclosure rule kicks in for TV and radio advertising in September.

http://money.cnn.com/2010/04/02/pf/free_credit_report/

Edited April 6, 2010 by alienlovechild

[Obama 2012 1,714]

Ah, another article for the stupid. More mandates for the idiots out there.

If people would READ what the hell they are signing up for, instead of just ASSUMING, they'd be in much better shape.

There's no 'trickery' involved here and anyone who is complaining was an idiot in the first place.

You do get your report for free, but you need to cancel within 30 days usually not to be charged for the monitoring service. They tell you this when you sign up! It's not really that difficult to understand.

[Martyshk 137]

IMO, if a site asks you to input a CC# that should set off an alarm right there.

I went to the freecreditreport.com a while back and once I got to the "enter your CC information" I just closed the window and that was it.

[SMR 368]

IMO, if a site asks you to input a CC# that should set off an alarm right there.

I went to the freecreditreport.com a while back and once I got to the "enter your CC information" I just closed the window and that was it.

I went to freecreditreport.com, got my credit report, read everything, and called and cancelled the service after getting the report. Didn't cost me a cent. Just read what you sign.

[Martyshk 137]

I went to freecreditreport.com, got my credit report, read everything, and called and cancelled the service after getting the report. Didn't cost me a cent. Just read what you sign.

Yeah, I wanted to do that.... but then I didn't... Gonna have to do what you did soon though. Just to check the score. Last time it was pretty good, just want to make sure it stayed that way before we goes buys a car this fall.

[Usui Takumi 1,562]

I went to freecreditreport.com, got my credit report, read everything, and called and cancelled the service after getting the report. Didn't cost me a cent. Just read what you sign.

Yeah I do the same. One time they charged me anyway, so I just marked it online as an error and my CC company did the rest.

[Hilarious Clinton 452]

But the pop-up said it was free. But I did win a laptop.... right?

[PhiLandShiR 18]

Ah, another article for the stupid. More mandates for the idiots out there.

If people would READ...

READ??!!?! thats a 4 letter word here on OT.

Shame on you...

[one...two...tree 2,762]

There's no 'trickery' involved here and anyone who is complaining was an idiot in the first place.

Oh really?

The Better Business Bureau has received more than 11,000 complaints about FreeCreditReport.com. Experian has twice settled with the Federal Trade Commission over deceptive-advertising charges related to another of its credit-monitoring sites, Consumerinfo.com. The company paid the FTC more than $1 million in fines.

Possin's suit takes issue with FreeCreditReport.com's pervasive TV spots, in which a shaggy-haired young man sings with a backup band about his poor credit. The jingles include lines like "F-R-E-E / That spells 'free' / Credit report dot com, baby."

"FCR.com's television, radio, and Internet advertisements misrepresent the costs of the service it provides to consumers," Possin's lawyer, John Balestriere, said in an e-mail to CNNMoney.com. "The only price mentioned anywhere is 'free,' [and] this representation is not true."

The only authorized site from which to get a truly free report is AnnualCreditReport.com, which is run by the FTC. Most people are legally entitled to a no-cost report once a year from each of the credit agencies: Equifax, Experian and TransUnion.

link

[Obama 2012 1,714]

Oh really?

link

Yes really.

There is no obligation to buy anything. You sign up, you enter your information, then you cancel right away. BAM it's free. It's not that hard at all and it's all right there for you in black and white.

Yes, it's stupidity of those who cannot comprehend/understand what's going on there when they sign up.

[one...two...tree 2,762]

Yes really.

There is no obligation to buy anything. You sign up, you enter your information, then you cancel right away. BAM it's free. It's not that hard at all and it's all right there for you in black and white.

Yes, it's stupidity of those who cannot comprehend/understand what's going on there when they sign up.

It's deceptive advertising which is why the company has paid so much in fines. Deceptive advertising is a real condition that consumers fall prey to.

[Obama 2012 1,714]

It's deceptive advertising which is why the company has paid so much in fines. Deceptive advertising is a real condition that consumers fall prey to.

It's not deceptive at all. Their ads clearly state: "With Enrollment In Triple Advantage." -- What's so hard to understand about that???

As I said, stupidity reigns supreme to those who don't pay attention to what the ads say.

Their ads sit within the confines of the law and are perfectly fine.

[Empress of Groovy 373]

I think most reasonable people would agree that it's at the very least sneaky. My impression of the freecreditreport.com ads was that they were hoping people would mistake it for AnnualCreditReport.com and think that the credit card number was required for some kind of identity verification. To the more savvy, this may sound stupid ("What sort of idiot would fall for that?"), but this sort of thing can be very confusing to someone who's not up on credit practices and how they work. Not to mention people who are new to the U.S. and the credit minefield. These "services" and how you sign up for them are deliberately confusing and misleading and often have the important information--that you have to sign up for monthly "credit monitoring"--buried in a block of text. Because of all the complaints, the sites are a bit clearer now, but a few years ago, I couldn't believe what they were getting away with--free! free! free! all over the place, and then at the very end, in tiny letters, "by the way, your credit card will be charged $14.95 a month unless you cancel."

In any case, there's little argument that these ads for a free credit report weren't advertising a free credit report; they were selling credit monitoring, which was never mentioned in the ad.

Edited April 6, 2010 by Empress of Groovy

[LaL 418]

... My impression of the freecreditreport.com ads was that they were hoping people would mistake it for AnnualCreditReport.com ...

that was my impression too, although I have used annual credit report.com for years - I had no problems there at all.

[Obama 2012 1,714]

I think most reasonable people would agree that it's at the very least sneaky. My impression of the freecreditreport.com ads was that they were hoping people would mistake it for AnnualCreditReport.com and think that the credit card number was required for some kind of identity verification. To the more savvy, this may sound stupid ("What sort of idiot would fall for that?"), but this sort of thing can be very confusing to someone who's not up on credit practices and how they work. Not to mention people who are new to the U.S. and the credit minefield. These "services" and how you sign up for them are deliberately confusing and misleading and often have the important information--that you have to sign up for monthly "credit monitoring"--buried in a block of text. Because of all the complaints, the sites are a bit clearer now, but a few years ago, I couldn't believe what they were getting away with--free! free! free! all over the place, and then at the very end, in tiny letters, "by the way, your credit card will be charged $14.95 a month unless you cancel."

In any case, there's little argument that these ads for a free credit report weren't advertising a free credit report; they were selling credit monitoring, which was never mentioned in the ad.

I think: "With Enrollment in Triple Advantage" is pretty clear.