Free Credit Reports – Post-FTC Crackdown My Business Blog

Free Credit Reports – Post-FTC Crackdown

Those hooky satire songs from FreeCreditReport.com hide a dark secret. First of all, that dude is a French-Canadian, so he probably doesn’t even have a credit history in the U.S., and to make matters worse, that supposed dreamboat minstrel doesn’t seem quite as endearing once you realize that your “free” credit report actually came with a $79.95 annual membership (that is if you if you forgot to cancel or didn’t read the fine print). Raw deal.

Luckily, the FTC is fighting back on your behalf. Their first wave of attacks was a series of spoof ads that claimed that “anyone can write a catchy jingle, but only annualcreditreport.com provides you with a truly free credit report.” While they were dead wrong about their first statement (compared to the tunes that Eric Violette lip syncs, the FTC’s songs suck big time), they are right about the second. To be fair, though, once you log on to annualcreditreport.com, you’ll be assailed with sneaky offers for credit monitoring services once they pass you off to Transunion, Equifax and Experian, respectively. Plus, anyone who believes they get a free credit score from the FTC will be disappointed.

As the next part of the FTC’s crusade against the melodic misleaders, the commission has rolled out a new rule that forces companies like freecreditreport.com to include a prominent disclosure on their website that informs visitors that:

THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV. You have the right to a free credit report from AnnualCreditReport.com or 877-322-8228, the ONLY authorized source under federal law.

The links and phone number are mandatory, too.

This goes into effect on April 2nd. But come September 1st, things will get worse for guys like Violette and Ben Stein, when disclosures that state that “This is not the free credit report provided for by Federal law” will have to be included on audio and video advertisements as well. Which raises the question: “What rhymes with Federal law?”

More Facts About the Law

According to the final rule filed on March 3, 2010 by the FTC, the commission is exercising its right to clamp down on freecreditreport.com and others like it under the Credit Card Accountability Responsibility and Disclosure Act of 2009, which went into full effect in February 2010. Other interesting tidbits from the official rule:

Transunion, Experian and Equifax are barred from advertising on AnnualCreditReport.com until they comply with new disclosure rules. Apparently, they had ads on the official FTC site before, which (understandably) confused consumers.
The big three credit reporting agencies are no longer allowed to require you to set up an account in order to receive your report. However, doing so makes things easier the next time around when you want to pull your report again. You can still be asked to set up an account, but not until after you get your free credit report.
The FTC doesn’t have the power to ban the use of the word “free” in marketing materials, even in cases where the free-ness of the item is contingent on a purchase, which is probably a good thing. This is America, land of the free, right? A ban on free-dom would be a major blow to BOGO offers and coupon clippers nationwide.
Along with the disclosure and hyperlinks, websites must also include an eye-catching button that reads “Take me to the authorized source.” They even lay out a few rules for making sure that it stands out when compared to the commercial website’s own call to action buttons. Someone in the FTC must have a cousin who is a web designer.
The FTC went out of their way to make sure that YouTube videos advertising sites like freecreditreport.com didn’t slip through a loophole. Commercials on web 2.0 multimedia sites must also comply. And to make sure that they do, the FTC has hired a guy who will “monitor and evaluate the effectiveness of this section [of the law] and evaluate innovations in technology and advertising and will consider additional changes as necessary to achieve the statutory mandate.” Professional YouTube watchers, brush up your resumes!

Conclusion

So, what does this mean to you? Probably nothing, if you’re an MYC reader, since we’ve reiterated time and time again that annualcreditreport.com was the only real source for government sanctioned free stuff and you already knew all this. Plus, the credit monitoring services are still available with free trials if you’re interested in checking them out. Seeing as there is still no such thing as a free credit score from the government, it may be worth your while to give one of these free offers a try (read our review of TrueCredit Credit Monitoring from Transunion here). Just remember to read through the fine print and cancel on time if you’re not interested in paying the fees.

img c/o puci

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