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US Legislator Expresses Support to FTC Proposals

By Faye Mergel
Published: Sunday, December 13th, 2009

Democrat Senator Carl Levin of Michigan, who heads the Senate’s Permanent Subcommittee on Investigations, said the proposals by the Federal Trade Commission (FTC) to crackdown deceptive advertising on free credit reports would greatly help consumers. In a letter to FTC Chairman Jon Leibowitz, Levin said the changes will help assure consumers that they will get the free credit report that is guaranteed to them by federal law.

US Legislator Expresses Support to FTC ProposalsIn his letter, Levin noted that consumers who ask for a credit report from commercial sources often sign up for credit monitoring and other services without their full knowledge. Those consumers would later on be billed for services which they did not really ask for.

Levin sees a need for commercial sources to provide simple and honest disclosures regarding their advertisements for a free credit report. He said mandatory disclosures will allow consumers to know how they can get a free credit report without having to pay monthly bills. The legislator further said companies that trick people into subscribing to something they do not really need must inform the public how they can really get their credit report for free.

The proposed rule by the Federal Trade Commission would require commercial sources, such as privately-owned websites, to clearly place a disclaimer on their ads that they are not the websites sponsored by the federal government to provide free credit reports to consumers once a year. FTC also proposes that internet advertisers should include a link that would lead consumers to page where they can find where to get their credit report for free.

FTC proposes that internet sources should include web address of the free-credit-report site and its telephone number. Moreover, the Federal Trade Commission plans to remove all commercials for privately-owned sites on the government-sponsored reporting website to avoid confusion. The FTC says those commercials should only be shown after a consumer gets a copy of his credit report.

However, Equifax, TransUnion, Experian, and other companies strongly oppose the changes because it will greatly cut down their profit. A great portion of the bureaus’ profit comes from compiling and providing reports to consumers, and it would plummet if consumers do not subscribe to their services. The bureaus fear that they will not be able to continue providing services to its clients and to the public if their funds are depleted.
To know what the public thinks, FTC encouraged consumers last month to express proposals regarding free-credit-report websites. Comments were accepted and compiled until Dec 7. The proposed changes will be implemented by February next year, when the CARD of 2009 will be fully implemented.

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