Remember when you could not turn on your television without seeing and hearing a free credit report jingle? Goofy merry men dressed as pirates lyrically painting a picture of why we should all check our credit reports. Besides, it was free, right?
It depends on your personal definition of free. Which for the advertisers meant free as long as you don’t mind placing your foot in a proverbial snare so they can shake money out of you later.
Then the FTC brought down the hammer. Full disclosure of where consumers could obtain their federally mandated credit report. Too many consumers did not understand that they could go to www.annualcreditreport.com for a free credit report with no-strings attached (no credit score though, the law does not require it currently). The level of advertising for commercially generated free reports was enormous. The most well known free credit report site reportedly spent $100 million annually on advertising.
How much free stuff can you give away with an advertising budget of $100 million? As it turns out, only so much, people ended up with credit card charges they did not want. To get the free credit report they had to sign-up for a 90 day or so free trial of identity theft protection or credit monitoring. If they did not cancel by the 90th day they would be charged, the complaints flowed like an angry volcano.
Per the FTC enacted disclosure any website offering free credit reports must now place at the top of the 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.
The Web site disclosure must include a clickable button stating Take me to the authorized source and clickable links to AnnualCreditReport.com and FTC.GOV.
There are a thousand ways to skirt regulation, so the new thing is to offer a free credit score instead of a free report. The musical tune changed from free credit report to free credit score. Baseball outfield ad banners changed from free credit report to free credit score. However, the free credit score is a gigantic ruse. The score provided is not even the FICO score used by 90% of lenders and 100% of mortgage approvals. Just a fictitious self-created formula to get money out of unsuspecting consumers.
If your New Year’s resolution was to improve yourself this year, go to www.annualcreditreport.com right now and print off a free copy of your credit report for your records. If you want to know your FICO score go to www.MyFICO.com, it isn’t free, but at least you will get the score a lender uses.
About the Author: Patrick Ritchie loves teaching about credit; he is the author of The Credit Road Trip and The Credit Road Map series of books. Check out his free online classes at www.CreditLiteracyProject.com.
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