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FTC Seeking Comments for 2010 Changes on Free Credit Reports

By Faye Mergel
Published: Monday, October 19th, 2009

The Federal Trade Commission (FTC) is changing the way “free” credit reports are marketed. Federal regulators say changes will be in line with the new Credit Card Responsibility and Disclosure (CARD) Act of 2009. The bill was first signed by President Barack Obama on May 22, 2009 with the aim of protecting consumers from onerous fees imposed by creditors. CARD Act also aims at assuring that consumers fully enjoy their rights, including the right to a free credit report once in every twelve months.

FTC Seeking Comments for 2010 Changes on Free Credit ReportsFair Credit Reporting Act (FCRA) entitles every consumer free access to his records with the three major credit reporting agencies (CRAs). The CRAs, Equifax, Experian, and TransUnion, are mandated by federal law to give consumers their free report once a year so they can assess their debt standings. This would help them make better financial decisions since it lets consumers know how well they are doing with their debt management.

However, FTC received several complaints from consumers who are misdirected from the FTC-backed Annualcreditreport.com. As noted by complainants, they were misdirected from Annualcreditreport.com and ended up in commercial sites which claim to offer free credit reports. But it is only after engaging in irreversible deals that they found out about fees charged along their records.

FTC expressed its plans to impose more regulations on CRAs and companies offering similar services in order to prevent consumers from being misled. Regulators say they are collecting comments on their proposed changes so they can know about the opinions of general consumers. They can email their suggestions through FTC’s official website or they may write to FTC’s mailing address at FTC, Office of Secretary, Room H-135 (Annex T), 600 Pennsylvania Ave., NW, Washington DC, 20580. Comments will be accepted until November 30.

Giving consumers warning that they are not in the government-sponsored Annualcreditreport.com is one of the proposed changes. Companies will not be allowed to use the “free credit report” tag if they do not issue sufficient warning.

Regulators also recommend that links directed to official websites of the major CRAs, which provide information to consumers through Annualcreditreport.com, be removed to avoid confusion. Additionally, other advertisement for paid products, such as credit monitoring, could only be offered after consumers get their free report.

As noted by advocates, this will allow consumers to really get free services without being marketed with products they do not really want. They encourage consumers in sending their suggestions so FTC can come up with better decisions in 2010.

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