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No more “Free” Credit Reports

By Faye Mergel
Published: Wednesday, April 21st, 2010

AGERM-00121327-001Websites offering free credit reports can no longer enroll people in their schemes under false pretences. Now websites are required to give more clarity to consumers by the law.

Credit Bureaus now are compelled by the law to show a warning tag stating that the free credit report which consumers are entitled to by law is not the same free credit report marketed by the company, under the new CARD Act of 2009.

According to The Federal Trade Commission, free credit reports are available only at www.annualcreditreport.com and consumers can receive one free credit report per year from all of the three major bureaus, Experian, Equifax and TransUnion.

“Consumers will think they’re getting a report under the law, but will unknowingly get credit monitoring and other services they didn’t ask for and then be charged fees for them.” said Tiffany George, an attorney for FTC

Consumer woes

Consumer complaints stocked up as thousands of consumers were unaware of their scheme or the service they had been enrolled for after expecting just free credit reports. Many consumers did not know about the charges until the bills arrived. These companies charge $15 onwards for free credit reporting.

Massachusetts’s R. Spath was one of the many enrolled in services they had not asked for. “I have made the mistake of trying to get a free credit report only to be badgered into handing over credit card information ‘for information only’ and find that I have been charged fees that I didn’t agree to because I didn’t cancel something in time, This practice is deceptive and preys on individuals who typically cannot afford such fees.” Spath told the FTC.

“Comments from most people indicated that they didn’t know that they had signed up for the service in the first place, so they didn’t even know there was a period of time in which they could opt out,” said Tiffany George.

New laws and its impact

The result of the passing of the new laws have been companies offering free scores and free trials instead of free credit reports and in some cases credit reports at very low prices.

FreeCreditReport.com owned by Experian has mentioned that they do not provide free credit reports and a nominal price of $1 is being charged for reports.

FreeCreditReport.com has offered to give the $1 they charge for free credit reports to charity.

The FTC will be monitoring other sites to keep a check on how other companies are dealing with the ne laws. “Companies who fail to comply with the rule can be subject to an FTC enforcement action,” she added.

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