FTC Amends Free Credit Reports Rule

[Barry]

Hello FICO Forums members!

Did you know that on April 2, 2010, a new amendment to the 2003 Free Annual File Disclosures Rule goes into effect? 

This new rule by the Federal Trade Commission (FTC) will require new disclosures to help consumers avoid confusing “free” offers – which often attempt to lure you into spending money on credit monitoring or other products or services – with the free credit reports available at www.annualcreditreport.com, the only authorized “central source” for truly free credit reports.

Highlights of this new rule

•   Web sites offering free credit reports will be required to provide the following disclosure at the top of each Web page: 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.

• Web site disclosures must also include a button indicating “Take me to the authorized source” with clickable links to www.annualcreditreport.com and FTC.GOV.

• For consumers visiting the AnnualCreditReport.com site, the three national credit bureaus – Equifax, Experian, and TransUnion -- will no longer be able to advertise on the home page.  Such ads can only appear after the consumer has successfully obtained their free credit report from AnnualCreditReport.com.

• Similar disclosures for television and radio advertisements will take effect on September 1, 2010.

What do you think?

• Is such a rule necessary to protect consumers?

• Should the government stay away from such regulations and let the “buyer beware”?

• Have you ever been confused by a “free credit report” advertisement?

• Do you agree or disagree with the many State Attorneys General who believe that AnnualCreditReport should be a .gov instead of .com?

FTC Links:

• File a complaint with the FTC
• FTC Amends Free Credit Reports Rule To Help Consumers Steer Clear of ‘Free’ Offers that Cost Money  
• Free Annual Credit Reports

As always, please share your opinions with the FICO Forums community!

[Uborrow-Upay]

Hi, Barry!  Thanks for posting this.

We've had threads about this issue in the forums, the most recent one triggered by a news report of  "...a Wisconsin woman suing credit reporting agency Experian because its ubiquitous advertisements for FreeCreditReport.com made her think she could go to that site to get a free credit report...."

My feeling is that annualcreditreport ".com" should have been  ".gov" right from the beginning.  Had the government done that, there would never have been any confusion at any time.  

It seems quite strange to me that all other government sites use that ".gov" extension.   I can't help but wonder who got greased by the CRAs to allow a ".com" extension to be used for this purpose, and to permit CRAs to advertise on the site... at all.

That being said, the additional rules should finally be enough to "protect" consumers, albeit from themselves.  But I feel that no matter how many disclosures, disclaimers or warnings, there will always be some folks who will still eat the little dessicant packages (shipped with electronics) that are clearly marked "DO NOT EAT", and then complain that the government didn't do enough to "protect" them...

Maybe the government should concern itself more with providing an education to folks, rather than babysitting them.

[mauve]

I feel the same way!  It bothers me that USPS.com is used instead of USPS.gov - annualcreditreport.com being a .com absolutely make it easier for other places to seem no more or less legit.  In fact, when I started looking for info on where to do the annual free report, I looked for a while to figure out which one was the real one and the .com threw me for a loop.  Most people I know might not believe the legitimacy of freecreditreport.com and the like, but they don't know how to figure out the right one, and I sincerely believe that a .gov domain name would go a long way towards making it easier to discern!

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My feeling is that annualcreditreport ".com" should have been  ".gov" right from the beginning.  Had the government done that, there would never have been any confusion at any time.  

[Anonymous]

I agree. Some of the companies are a bit slimy, but OTOH some of them make it somewhat clear.  I think some people sign up to get the report thinking they'll outsmart the company by canceling within the 30 days and then forget to do so.  The government will never save everyone from themselves.

As to USPS.com, I think that is more logical to have as a .com because while they are a government organization, they are also a retail operation that markets to primarily businesses.  The Post Office does try to run at least somewhat like a business.

[Peach8321]

I think this rule is useful...these companies have purposfully misled consumers (FREEcreditreport - people believe free means free and not "free except in the case of....).

I've never personally been mislead but I do think it's easy to be so, expecially if you are new to personal finance and are trying to do the right thing but you don't know the places to look (like MyFico) to get real advice.

As for the .gov versus .com, I think it should stay .com because MOST people don't know the "other" options (.org, .gov, etc) and it might be too obscure for them to find. 

Additionally, in response to the post office being .gov - the "United States Postal Service" is NOT a government institution and it is a private business...therefore it should NOT be .gov but instead stay .com (and as a side note, .com and .gov should both be bought by places like the White House, Congress, etc in order to keep them safe from porn or other nefarious sites buying the .com name to confuse people).

I also agree with Uborrow - instead of trying to defend the people aginst corruption, the government should spend money educating children about personal finance...I absolutely believe a mandatory semester long class on personal finance should be requried for all high school students and to not pass it means you don't graduate...maybe someday :-)

[Anonymous]

I don't think that we should have to pay the credit bureau to check or monitor our credit report s and I think it should be more difficult for negative stuff to get on your credit reports without your knowledge or consent; that you should be able to challenge it before it makes it on the credit reports; because then for me all I get is that the company said it is truth so it is truth. It is not fair. And I also don't think that negative stuff should not stay on your credit report for more then three years unless it is a bankruptcy and even then not more then seven; when you get layed off or lose your job bad things are going to happen; you shouldn't have to pay for it the rest of your life. And the These Credit Bureaus need to be watched and regulated to made sure that they remove stuff that needs to be removed and take negative info off your report in a more timely manner. Some of the Credit bureaus work better then the others for me Equifax is the worse it seem like they judge you so hoarsely; and Equifax is the Credit Bureau that everyone uses so it should be more up to date and accurate. Also the credit scores I get should be the same credit scores that the banks and other companies get. Why are the Credit Bureaus giving them difference scores then the consumer is getting and they are always lower, this also needs to be addressed.

[Anonymous]

Not being aware of any of this, yesterday i got my score from www.annualcreditreport.com which in turn took me to the Transunion site. The scores now range from 501-990. I am at a 784, which gave me a grade of "B".  I thought they went up to 850, So now i am wondering if i got a true fico score or if this was just another Fako score. The report was free but i I paid $7.95 to get the score. Can anyone help clear this up for me, please!

[Scamp]

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@Anonymous wrote:

Not being aware of any of this, yesterday i got my score from www.annualcreditreport.com which in turn took me to the Transunion site. The scores now range from 501-990. I am at a 784, which gave me a grade of "B".  I thought they went up to 850, So now i am wondering if i got a true fico score or if this was just another Fako score. The report was free but i I paid $7.95 to get the score. Can anyone help clear this up for me, please!

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FICO score ranges do only go up to 850, so it does sound like you got a FAKO TU score, unfortunately.

[Anonymous]

Anything to take commerce out of it. And why only one free report per year? How about a free 3-in-1 each month? We're all trying to get our scores back up and need to monitor them. Here's another thing: The scores shown should be UP TO DATE. Even MyFICO's scores are old. What kind of help is that?

[Anonymous]

Huzzah!  Well spoken!  I agree with it all.

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@Anonymous wrote:

I don't think that we should have to pay the credit bureau to check or monitor our credit report s and I think it should be more difficult for negative stuff to get on your credit reports without your knowledge or consent; that you should be able to challenge it before it makes it on the credit reports; because then for me all I get is that the company said it is truth so it is truth. It is not fair. And I also don't think that negative stuff should not stay on your credit report for more then three years unless it is a bankruptcy and even then not more then seven; when you get layed off or lose your job bad things are going to happen; you shouldn't have to pay for it the rest of your life. And the These Credit Bureaus need to be watched and regulated to made sure that they remove stuff that needs to be removed and take negative info off your report in a more timely manner. Some of the Credit bureaus work better then the others for me Equifax is the worse it seem like they judge you so hoarsely; and Equifax is the Credit Bureau that everyone uses so it should be more up to date and accurate. Also the credit scores I get should be the same credit scores that the banks and other companies get. Why are the Credit Bureaus giving them difference scores then the consumer is getting and they are always lower, this also needs to be addressed.

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