"Free Credit Report" Ads Mislead Consumers

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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.