FTC’s new rules on free credit report ads start in February


The ubiquitous ads for web sites claiming to help you get a “free” credit report  aren’t the official government-mandated site (AnnualCreditReport.com) for obtaining free reports entitled to you each year by federal law. At these soundalike sites, “free” isn’t really free — it comes with strings attached. They sign consumers up — sometimes without their knowledge — for credit monitoring services and charge recurring monthly fees to their credit cards, reports CreditCards.com.

The FTC has proposed new rules to help decrease the number of consumers who are duped into signing up for services they don’t want and make it easier for people who only want to get their free credit reports to do so — without hassle.

“There has been a proliferation of confusing advertising regarding where consumers can obtain their free annual [credit] file,” according to the FTC.

The new rules were drafted because a provision in the Credit CARD Act of 2009 says, beginning Feb. 22, 2010, radio, TV and other ads for free credit reports must include the following disclaimer: “This is not the free credit report provided for by federal law.”

“These advertisements direct consumers not to AnnualCreditReport.com, the authorized source for free annual file disclosures, but to commercial Web sites operated by the nationwide CRAs (credit reporting agencies) or others that sell a variety of products and services,” according to the FTC. “Further, when a consumer uses an Internet search engine to find the Web site for free annual file disclosures, the search engine will usually list ‘sponsored’ links — again, selling products and services — such as ‘FreeCreditReport.com’ first. As a result of this advertising, consumers are often misled and confused about where to go to obtain the free annual file disclosure mandated by federal law.”

The FTC is also seeking to make getting free credit reports on the official site — AnnualCreditReport.com — less confusing for consumers. Today, the site makes it easy for consumers to get sidetracked from the “free” path with ads and special offers for additional services that are not free. The proposal would ban those pitches until after consumers have signed up for their free reports. Also banned: requiring consumers to set up accounts on the site before they can get their free reports, said the story.