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Feds crack down on 'free' credit report offers

The feds haven't banned irritating 'free' credit report commercials, but they are making it tougher for consumers to be misled.

By Karen Datko Feb 24, 2010 8:38PM

How many people, we wonder, have been burned by ordering a “free” credit report, only to find out they’ve unwittingly signed up for paid credit monitoring?

 

There is only one official site for free credit reports -- AnnualCreditReport.com -- and thanks to new action by the Federal Trade Commission, you’ll have a better chance of landing there if you want a free report.

 

Starting April 1, those other sites -- which offer a “free” report in exchange for signing up for credit monitoring or some other service -- will be required to display in a very prominent way that the truly free site exists. Look for this wording at the top of each page, with appropriate links in place:

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.

Sadly, the disclosure won’t be included in radio and TV ads until Sept. 1. (That suggests we’ll be seeing the same tiresome freecreditreport.com ads, green wool tights and all, recycled by Experian until then. Let’s hope for the best. Meanwhile, you can watch the FTC’s spoof of those ads here.)

The new FTC rules also address confusion experienced by some who have tried to use AnnualCreditReport.com. After we referred an acquaintance to the site, she reported back that she had been directed to a paid site. She likely clicked on one of the ads from the three major credit bureaus at the free site. Under the new rules, you’ll no longer see ads there until you’ve pulled your three free credit reports -- one each from Experian, Equifax and TransUnion -- for the year.

 

Here’s another little trick if you’ve never used AnnualCreditReport.com: You could order a free credit report from Experian, Equifax and TransUnion all at once. But if you space them out -- one every four months -- you’ll be able to keep a better eye out for errors or for accounts that weren’t opened by you, which may mean you’ve been the victim of identity theft. (Paid credit monitoring is recommended for ID theft victims. However, for most folks, it’s easy and free to do it yourself.)

 

Why is your credit report important? The FTC advises, “Because the information in your credit report is used to evaluate your applications for credit, insurance, employment, and renting a home, you should be sure the information is accurate and up-to-date." 

 

If you want your credit score, you can either settle for an estimate or pay for it. (For more on that topic, read “The truth about free credit scores.”) Another hack, described by our partner blog The Dough Roller, is to sign up for the credit-monitoring service at myFICO, get your FICO credit score, and cancel the credit-monitoring service within 30 days, before your credit card is billed for the $89.95 annual subscription.

That sounds like too much hassle to us, particularly when getting a free credit report is so simple.

 

Have you inadvertently signed up for a paid service when you thought you were getting a free credit score?

 

Related reading:

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