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Free Credit Report Ads under Fire

Posted January 18th, 2010
by PersonalLoans.org Staff

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If you’re like most folks, you can’t stand the jingles from those free credit report ads on TV and radio. However, if you’re like most folks, the reason you can’t stand them is that you can’t get them out of your head. It’s proven to be an effective, if annoying, marketing campaign, as the website offering credit reports has seen a huge influx of business due to the ads.

The problem is, however, that the credit reports aren’t exactly free. At least, not at the advertised websites.

Federal law requires the three consumer credit reporting agencies to offer a free copy of your credit report once every 12 months. There is a website set up to get them: annualcreditreport.com. The site usually advertised on television and radio, freecreditreport.com, is actually a company that requires you to purchase other services, such as a copy of your credit score, in order to get your “free” credit report.

The Attorney General of the State of Illinois, Lisa Madigan, has had enough of those commercials. Along with 42 other state attorneys general, she is petitioning the FTC to tighten up advertising restrictions on the company and others like it.

The reason Madigan and the other AGs are so concerned is that the ads can be confusing for customers. Customers call a phone number or log onto a website, thinking that they’re going to get a free credit report. These customers have probably heard about the fact that they’re entitled to an annual copy of their credit report, so they’re likely to believe the advertisement.

When the customer calls, however, the company requires them to purchase something else – such as a copy of their credit score – before they will send the credit report. The customers incur costs that they don’t expect to access information that’s otherwise available free of charge.

Madigan is hoping that the FTC will require companies that offer credit reporting services to add specific disclosures to their advertisements that let customers know that there are potential charges involved. In addition, she is asking that the commercials also offer their customers the option to get the official free copy of the credit reports.

Whether or not the effort will be successful or effective remains to be seen. In the meantime, the lesson for consumers is that it’s important to listen carefully to everything you hear, and that if you call and ask for something that’s supposed to be free be wary of providing a credit card number or banking information.

Photo via An Nguyen

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