"Free Credit Report" Ads Mislead Consumers

(CBS)  Those catchy commercials advertising free credit reports are hard to miss. But many consumers complain about their truthfulness, and now the government is proposing a crackdown as CBS News correspondent Hari Sreenivasan reports.

The ads star slackers made poor by identity theft singing about their troubles. Flight attendant Euridicis Romero remembers the jingle, but also the hassle that came with getting a credit report from FreeCreditReport.com.

"It wasn't actually free," she said.

A week after Romero got her report, she noticed charges on her credit card for credit monitoring: $15 dollars a month. It took her three weeks of arguing before she got her money back. She's one of 11,000 people to complain to the Better Business Bureau.

"I was so upset," Romero said. "It wasn't about the amount of money; it was the principle. If you say it's free, give it to me free. If you say you're going to charge me $14.99, then I'm aware of it."

When retiree Michael Schwartz signed up, he did not want credit monitoring services either, but FreeCreditReport.com charged him for that as well.

"I didn't think monitoring was a necessity," Schwartz said. "You know, it's like taking your temperature … every day. You just don't need to do that."

Schwartz says the fine print on the company's Web site is not nearly as prominent as the word "free."

He said he was "absolutely misled."

But the company says there are disclaimers online and on air - that voice at the end of the commercial that says "offer applies with enrollment in triple advantage."

Triple advantage is the name of the credit monitoring service. FreeCreditReport.com says only "a very small percentage of consumers … genuinely do not understand" that they signed up for the service. "If we are notified by these customers we will provide a full refund."

Credit counselor Steven Burman hears the complaints. He says disclaimers should be clearer.

"Maybe a disclaimer that would say, 'The only free credit report that is provided is through AnnualCreditReport.com.'"

AnnualCreditReport.com - which is run by the government - provides one free credit report to every consumer, every year. To get the word out, the Federal Trade Commission has launched ads of its own.

"Beware of the others, there's always a catch," the FTC ad goes. "They claim to be free, but strings are attached."

The Federal Trade Commission is considering rules to mandate that competing Web sites disclose that people can get a free credit report at AnnualCreditReport.com. The agency is accepting public comment on that plan until Dec. 7.

[genniechan]

Thank you for this very informative article of yours. You have explained everything well. I appreciate that you shared this to us. I checked my credit report score twice a year i get if from annualcreditreport.com and from http://www.ezcreditrepairsolutions.com/credit-report-score/ I only go to trusted sites. I've been doing this for years also to prevent ID Theft

[JayAdler1]

Whether the three credit agencies sell reports and ask for continuing subscriptions, sort of like the CD scams and TV gadgets and Queen size mattresses sold on the Web that have no label, this is not commensurate with the seriousness of their mission to the public. Recently I found out that if you go to a credit bureau site, you can with many clicks get to a page where you pay about $8.00 and they download your score to you and that's it. Most of our assets and cash are in brokerage firms which the bureaus cannot access. I have almost an 800 rating and so does everyone else at home because we do not use credit cards. I was thinking about accurate judgement on their part when most of what we have is deposited with brokers in money market accounts and stocks. As I say, this is proprietary information.

[tg_del]

The web sites for credit reportiing agencies make it appear that you must enter a credit card number for additional verification of your identity, and use their deception to take MORE money from you. It is the kind of typically manipulative, misleading, deceptive tactic that has kept these operations so profitable at your (unintended) expense for so long. It's time Congress investigated these tactics, and put the brakes on credit reporting agencies and credit card companies!

[CJ49]

I was told months ago that they cancelled my so called "membership" and they're still charging me. I've been round and round with them and finally made a complaint to the BBB. Since I've asked for a refund, now they're emailing me about "unlocated charges". Don't they know who they bill?

[JoeInBama]

It is unbelieveable how ignorant many people are. When you got to that website, it specifically tell you that you are enrolling in a credit monitoring service and that you will be charged a monthly fee for it. Quit whining, get over it and actually read the information on things before you sign up. By the way, nothing in this world is free... everything has a price...

[afmcalax]

What part of Free Credit Report.com do you not understand? FREE means FREE except in American business where FREE means to mislead and charge hidden fees. You can blame the consumer for being naive, but again it is another example of American business profiting off of a service that offers little to no value. If the banks, credit cards companies, and corporations did their job and protected your personal information like they should then most of this fraud would disappear. They have made a profit center off of mishandling your information. That is really what is ignorant, we let business get away with it.

[jcnbma]

Some of these commenters should be rounded up and flown to the moon on a one-way ticket. Their lack of education is scary and dangerous.

[jcnbma]

"If we are notified by these customers we will provide a full refund."

This is BULL! I found out I had been charged and called them. The rep argued with me for 10 minutes, then suggested I call the POLICE to report that someone had hijacked my credit! I could NOT believe the nerve! I called my credit card company (Bank of America) and they removed the charge. "MyNotFreeCreditReport.com" is a fraud and they should be fined and forced to disclose their charges more prominently.

[nowhiningallowed]

How stupid is the "consumer" to think they haven't any responsibility in any of this? Why should government protect an individual from their own stupidity and poor choices. The ad clearly states that the reports are free with a commitment to the other agency. Now if the stupid consumer doesn't bother to get details and gives away their credit card number for something supposedly free, it's their own fault that they get duped and taken advantage of. Too many consumers refuse to use their brains, take personal accountability and self-responsibility. Stop expecting the nanny state government to hold your hand and protect you from your own failed devices.

[rickwar]

It's about making a buck, not protecting the consumer.

Who came up with the "credit rating system"? The credit rating companies and a few banks.

When a business runs a credit check they pay.

Then you sign up to "check" your credit and they charge you.

Then they tell you to check it often and raise your credit score, but lets say you pay cash for everything (you know, that old fashioned way, you have the money and you pay for it then) Well then you have poor credit because you have no history. So then to "assist" your credit score (which they made up) you are told to get some credit, in other words go in debt.

Then you are worried about your score and try to get a high number to save a few bucks, but then you are over a little and your credit score goes down. The chase is on! And these guys love it for the tune of about 200 bucks a year.

Most states offer a once a year really free credit check and here is a dirty little secret you can pay a nominal fee and have your bank run the check and it will be less that 200 bucks a year.

But this is big business and big business profits from the stupidity of the American consumer like no others.

[omnibus66]

The sooner in life you learn that nothing is truly "free", the better off you will be. Sure, sometimes you can beat the system by reading the fine print and carefully navigating around the traps placed to catch the unwary, but it takes a lot of energy, and may not be worth it in the long run. Personally. I think the FreeCreditReport.com ads are among the most annoying on TV, and immediately mute them when they appear.

As to government stepping in to protect gullible people from themselves and borderline scammers, I have mixed feelings. On the one hand, there are definitely those amongst us who, through no fault of their own, lack the mental faculties to see through these misleading ads. On the other hand, these are probably the same people who voted for GW Bush, and are now protesting against health care.

Go figure.