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FTC to monitor Credit Bureaus

By Faye Mergel
Published: Thursday, May 13th, 2010

AGERM-00240715-001Companies offering free credit reports are now expected by the FTC, according to the April bill, to show warning labels on all their advertisements for they “free” credit reports. All websites must providing “free” credit reports must clearly show links to AnnualCreditReport.com, a government run site which is the only site offering credit report free of charge and with no strings attached. Companies may also provide a hotline for credit report information, 877-322-8228. TV and other mass media will also be expected to do so starting September 2010.

“Consumers thought that they were getting a truly free credit report, when they were really just trying out a paid service,” said Gerri Detweiler. Detweiler an advisor for Credit.com stated that consumers were under the impression that they were getting reports, but many were conned into free trial services which then lead to an annual subscription and enrolment in other services, if the consumer did not cancel his free trial within the allotted time. In most cases consumers could not unsubscribe or were not aware of the subscription details.

Tiffany George of the FTC said this regulation seeks to decrease the number of misleading advertisement and fraud cases. FTC took legal action against www.freecreditreport.com twice and the company was fined $1.25 million. FreeCreditReport.com is currently owned by Experian, a reputed Credit Bureau. Experian, now charges $1 for each credit report which they say will go to charity, in order to workaround the new bill.

“It does appear the credit bureau is one step ahead of the regulators, because this is such a profitable industry, I’m sure that the companies themselves are already at work to find new creative ways to get consumers to pay for their information.” Detweiler stated.

“[Consumers] have to understand that there is only one source for their truly free credit report each year, and that’s annualcreditreport.com, if you have to put in a credit or debit card number to get the credit report, then you’re probably using a trial service.” Detweiler said when she insisted that the bill was to help consumers find the right means to get their credit reports.

The FTC is said to be “carefully monitoring industry practices for compliance of the rule.”

“If you want to monitor your credit report, then it’s fine to sign to a service that will let you do that, as long as you know that’s what you’re paying for,” Detweiler advocated the use of credit monitoring services which in some cases can be very handy.

The new Credit CARD Act states that anyone below the age of 21 is not eligible for credit cards. Youngsters can however get joint account with an adult, or show they have capabilities or repaying loans to receive credit cards.

Detweiler believes with students out of the picture, Credit Bureaus will now create new strategies to appeal to the other section of society.

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