When Free Credit Reports Aren't So Free - How New Rules Force Ads to Disclose Costs

When Free Credit Reports Aren't So Free - How New Rules Force Ads to Disclose Costs

We've all seen the ads...those catchy "get a free credit report" TV commercials with the three young men dressed as pirates...singing the virtues and benefits of getting a free credit report. The only problem as shoppers of free credit reports have found out is that a "free" offer often comes with strings attached. People trying to obtain a credit report from sites offering supposedly free credit reports frequently end up frustrated and angered by misleading promises.

The Federal Trade Commission has implemented rules that address misrepresentation of free offers for credit reports let's take a look at what this new rule does, how it affects you, and where anyone can go to be absolutely sure a credit report offer is indeed free of charge.

Free Credit Report Offers Often Misleading

The fact is that many companies claim to offer credit reports free of charge but very few actually do. Experian (which is one of the three major credit reporting agencies in the U.S.) operates the sites FreeCreditReport.com and ConsumerInfo.com. These are just two examples where the use of the word "free" has come into question. The Experian sites package their credit report offer with a trial membership in a service product they call Triple Advantage Credit Monitoring. Seven days are allowed to cancel the membership, after which a $14.98 monthly fee goes into effect. Consumers are often not aware that they had signed up for an additional service.

New FTC Rule Requires Disclosure

Effective April 1st, 2010, the new rules instituted by the FTC took effect and regulate how companies can advertise credit report offers. The new law requires commercial websites that offer free credit reports to include a message box on the site that lets you know you can get a free credit report at annualcreditreport.com. Experts consistently strive to remind consumers that AnnualCreditReport.com is the one and only authorized source for getting a free annual credit report. As stipulated in the Fair Credit Reporting Act everyone has the right to obtain one credit report per year (free of charge) from each of the three nationwide credit reporting agencies Experian, Equifax, and TransUnion. Keep in mind that you won't be able to see or retrieve your FICO credit score at AnnualCreditReport.com, only your credit report.

The new law has an immediate impact on commercial websites that offer credit reports. As mentioned above, websites are now required to provide a message that directs consumers to the one and only government authorized website for free credit reports. On September 1st, 2010- the same rules apply to TV and Radio advertising.

Other Ways to Get a Free Credit Report

Aside from going to AnnualCreditReport.com, federal law states that anyone who has had adverse action taken upon them due to information from a credit report is entitled to receive their credit report free of charge. The adverse action could be a case of denied credit, an employment matter, or denied insurance. The report is not automatically sent to you you do have to request it. When any company takes adverse action against you due to credit report information, they are required to give you an adverse action document. That document lists the contact information for the credit bureau agency, whereupon you have 60 days to request a free report.

Additionally, consumers in Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, and Vermont, under their respective state laws, have free access to their credit reports.

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