You’ve probably seen the TV commercials offering you the chance to “Get your free credit report now!” One of the most common ad campaigns features a musical group of 20-something misfits playing guitars as they work in a restaurant dressed like pirates.
The problem: Those offers are misleading.
“The Federal Trade Commission has received complaints from consumers who thought they were ordering their free annual credit report, and yet couldn’t get it without paying fees or buying other services,” the FTC states on its credit report Web site. “TV ads, email offers, or online search results may tout “free” credit reports, but there is only one authorized source for a truly free credit report.”
Consumers should “avoid confusing ‘free’ offers – which often require consumers to spend money on credit monitoring or other products or services,” according to another FTC statement.
Now the FTC is doing its part to help. Its new Free Credit Reports Rule requires companies that offer “free” credit reports to post disclosures at the top of every Web page. The disclosure states:
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. In addition, each website must include a clickable button that reads “Take me to the authorized source,” with links to AnnualCreditReport.com and FTC.gov.
The new rule takes effect April 2, 2010 for websites. The exact wording of disclosures for TV and radio ads has not yet been decided, so for them the disclosure requirement does not take effect until Sept. 1, 2010.
Companies may still advertise that they offer access to free credit reports, even if their only “access” is offering a link to the official site. But regulators hope that the new disclosure will reduce the number of consumers who are fooled by scams in which a free credit report is offered as the bait for other scams.
In complaints to the FTC, consumers have said that such offers are often phishing scams intended to trick them into clicking on sites that steal their personal information. Others, including freecreditreport.com, offer “free” reports, but only after consumers pay a membership fee.
Freecreditreport.com is owned by Experian, one of the three major credit reporting agencies. The FTC’s new rule doesn’t address this directly, but it does restrict the credit reporting agencies somewhat by requiring them to delay advertising their products on AnnualCreditReport.com until after consumers obtain their credit reports.
So why should you check your credit report in the first place?
For starters, if you have good credit, you stand a better chance at obtaining credit, loans, or a mortgage; renting an apartment; getting a decent interest rate when refinancing a loan; and in some cases, qualifying for a job. If you don’t have good credit, by regularly examining your credit reports – ideally taking advantage of the three free credit reports (one from each credit bureau) each year via AnnualCreditReport.com – you’ll face up to your problem areas, and be able to get to work on fixing them. And if you have good credit, this can help keep you on track.
Not to mention that you’ll be better able to spot – and take action to correct – inaccuracies in your credit report. The sooner you discover whether a creditor has erroneously reported you delinquent on an account, or if someone has fraudulently opened an account in your name, the better. Too often, consumers who have otherwise been on good credit behavior have had their financial plans waylaid by errors in their credit reports.
Similar Posts:
- “Free” Credit Report Site Disclosures Now Mandatory
- FTC Cracks Down on Free Credit Report Scams with Catchy Parody Spoofs
- Top Three Credit Reporting Agencies for Obtaining Credit Report
- Consumer Protection – Don’t Leave It Just to Regulators
- Free Credit Scores On Track to Become Law
