People still getting snared by free credit report scams

Thursday, February 23rd, 2012 By

Credit Report

Consumers should stay away from websites that promise a "free credit report.". Photo Credit: TrinityCreditServices/Flickr/CC-BY

The Fair Credit Reporting Act gives every American a free copy of his or her credit report from all three main credit reporting bureaus every year. However, some are still falling prey to “free credit report” scams online.

Ads are slick, but please don’t click

Many online businesses and advertisements are perfectly reputable and safe, though the ones that automatically play videos no one wants to watch are definitely annoying. Some people may notice some of them which advertise getting a “free credit report.” It may not be a good idea to click them, as you have no idea who is running those sites.

For instance, according to MSNBC, a “free credit report” site was one of the online businesses run by Jesse Willms, a Canadian man who was recently sued by the Federal Trade Commission for running “negative-option” schemes, where a “free trial offer” is extended to consumers for a particular product. However, if a customer doesn’t cancel the trial right away, they start getting charged a lot of money. Willms and his companies bilked $359 million from 4 million people in five countries.

[A lot of those people likely had to get a payday loan cash advance to make up losses]

Ignore late-night television

Most people have seen the “FreeCreditReport.com” commercials, which still air. The format is still the same; a cheeky band plays some relatively upbeat pop tune and sings about how great it is to have great credit and tells them to visit the website. According to BusinessInsider, the site used a similar negative-option hook, where after a seven-day trial offer, charges are billed to a debit or credit card.

The site has also run afoul of the authorities. In 2005, according to the Federal Trade Commission, credit bureau Experian, which runs that site, had to pay the FTC $950,000 for misleading consumers in their promotion of the site and ConsumerInfo, a companion website. In 2009, according to SFGate.com, the website for the San Francisco Chronicle, the Credit Card Accountability Responsibility and Disclosure Act, or CARD Act, mandated that such commercials now have to audibly mention the government’s service for a free annual credit report.

Established channels

The best website for a free credit report is the one run by Uncle Sam, annualcreditreport.com. Through the site, consumers can request one free copy of their credit report from Experian, TransUnion and Equifax, the three biggest credit reporting bureaus. Anyone and everyone is eligible for one free copy from each bureau per year or in any 12-month period.

Anyone who needs additional copies or wants to keep more frequent tabs on their report can buy copies directly from the bureaus. It is not advisable to go through anyone else.

Sources

MSNBC

BusinessInsider

Federal Trade Commission

SF Gate: http://allbusiness.sfgate.com/economy-economic-indicators/economic-indicators/12345170-1.html

AnnualCreditReport.com: https://www.annualcreditreport.com/cra/index.jsp

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