A recent settlement was made between the Federal Trade Commission (FTC) and ConsumerInfo.com, Inc., doing business as Experian Consumer Direct. The FTC charged that ConsumerInfo.com was in violation of federal law by deceptively marketing "free credit reports" and not effectively disclosing that consumers would automatically be signed up for and billed $79.95 yearly for a credit report monitoring service if they didn't cancel the service within 30 days. The settlement requires ConsumerInfo to reimburse consumers, prohibits misleading claims of "free" offers, requires disclosure of terms and conditions of such offers and also requires ConsumerInfo to pay $950,000 to the FTC, which is to be used for consumer education.
The FTC complaint claims that the defendant used radio, television, e-mail and internet ads to lure consumers to their web sites, www.freecreditreport.comand www.consumerinfo.com. These ads promised free credit reports along with a bonus of free trials of a credit monitoring service. In order to receive a free credit report, consumers were required to provide personal information and a credit card account number. They were assured that their credit card account number would not be charged during the trial period but was necessary to establish their account.
The FTC complaint also charged that ConsumerInfo misled consumers about their association with the free annual credit report program that consumers are eligible for by federal law. The complaint alleged that ConsumerInfo did not disclose the fact that it was not associated with the official annual free credit report program.
Lydia Parnes, Director of the Federal Trade Commission's Bureau of Consumer Protection said:
"Consumers paid the price for ordering free credit reports from freecreditreport.com. It's unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn't want in the first place. Consumers also need to be alert about imposter sites - sites that misspell annualcreditreport.com or use sound alike names, but don't link to the authorized site. We are sending letters to operators of more than 130 impostor sites to inform them that we know they are out there and that attempts to mislead consumers are illegal."
Consumers can, in fact, get one free credit report yearly from each of the three national credit reporting agencies. Consumers can get their free reports by phone, mail or at one authorized web site, www.annualcreditreport.com.
The settlement requires that ConsumerInfo reimburse consumers who enrolled in their credit monitoring program between 2000 and 2003. Consumers who qualify for a refund should receive a notice from ConsumerInfo by e-mail or first class mail within the next few months.
For more information and to see a list of frequently asked questions regarding your consumer rights pertaining to credit reports, go to www.ftc.gov/freereports. The FTC has also established an information hot line. The phone number is (202)326-3457.
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