Beware of 'Free' Credit Reports: FTC

By John Scorza, CCH Washington Staff Writer

An Internet marketer has settled charges with the Federal Trade Commission (FTC) that it deceptively advertised free credit reports.

The settlement requires Consumerinfo.com Inc., doing business as Experian Consumer Debt, to compensate deceived consumers and pay $950,000 to the FTC to fund consumer education. The settlement bars the company from making deceptive claims about free offers and requires adequate disclosures about such offers.

The FTC said the company used radio, television, e-mail and Internet ads to direct consumers to their Web sites--www.freecreditreport.com and www.consumerinfo.com--and offered free trials of their credit-monitoring service.

But the FTC charged the company with failing to adequately disclose that consumers would be charged $79.95 if they failed to cancel the service within 30 days.

The FTC further charged the company with misleading consumers about their affiliation with an annual free credit report program established by federal law that allows consumers to get one free credit report each year from one of the three national consumer reporting companies.

That program, initiated in the Western states, is scheduled to cover all U.S. consumers by September 1. More information can be found here: http://www.annualcreditreport.com.

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Posted August 29, 2005.