FTC Finally Forces FreeCreditReport.com To Be Honest In Its Advertising

from the it-ain't-really-free dept

It's been many years since we first wrote about the scammy services set up by the major credit reporting agencies to pretend to give you your federally guaranteed free credit report. The worst of the bunch has been FreeCreditReport.com, run by Experian, which despite its name, was actually just a way to get people to sign up for costly monthly credit monitoring services. The place to get your real free credit report is AnnualCreditReport.com, but FreeCreditReport.com tricked an awful lot of people into believing it was the real site, leading many to end up paying money (a lot of it) when they just wanted their mandated free report.

The FTC has been battling Experian and the other rating agencies for years over this blatantly misleading advertising. The misleading ads have been incredibly lucrative for Experian, who apparently has convinced an astounding 20 million people to sign up for FreeCreditReport, and spends $70 million per year in advertising to get more people to sign up. For all that, the FTC forced Experian to pay a measly $1 million in fines (and refund money to plenty of customers), but you can understand why Experian has kept up its misleading adverising.

However, Experian and the other credit reporting agencies are now required to clearly disclose what's going on, and they're testing much more straightforward messages on their websites. For example, MSNBC reports that some visitors to FreeCreditReport are already seeing a giant gray box at the top of the page with text that reads:
"You have the right to a free credit report from AnnualCreditReport.com ... the only authorized source under federal law,"
And, with it, there's a link and a call to action: "Take me to the authorized source."
What's amazing is that it took this long to actually require basic truth in advertising on such ads.
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Filed Under: credit reports, free credit reports, truth in advertising
Companies: experian, freecreditreport.com, ftc


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  • identicon
    Anonymous Coward, 3 Mar 2010 @ 10:32am

    You mean the FCC actually did something for the public good? Wow, what is this world coming to?

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Mar 2010 @ 11:37am

      Re:

      No, the FTC did.

      link to this | view in chronology ]

      • identicon
        Anonymous Coward, 3 Mar 2010 @ 9:52pm

        Re: Re:

        Oops, my mistake.

        link to this | view in chronology ]

        • identicon
          Anonymous Coward, 4 Mar 2010 @ 7:33am

          Re: Re: Re:

          I guess I should have known better than to think the FCC would do anything in the public interest. Wishful thinking on my part I guess. The FCC exclusively serves the corporate interest.

          link to this | view in chronology ]

  • identicon
    Shawn, 3 Mar 2010 @ 10:33am

    Unfortunately, If i saw that notice on the top of a web-page I would be very unlikely to click on it. It looks like 'fishy' banner ad that would take me to a scammers site.

    link to this | view in chronology ]

    • identicon
      taoareyou, 3 Mar 2010 @ 12:15pm

      Re:

      It would not matter if you clicked on it. The little yellow box is text only and does not even have a hyperlink. :)

      link to this | view in chronology ]

  • identicon
    Anonymous Poster, 3 Mar 2010 @ 10:35am

    They changed it now; it's a simple yellow box with the text "Free credit reports are available under Federal law at: AnnualCreditReport.com."

    Sneaky, in that they still have the warning, but it's much less noticeable now.

    link to this | view in chronology ]

    • icon
      Mike Masnick (profile), 3 Mar 2010 @ 10:37am

      Re:

      They changed it now; it's a simple yellow box with the text "Free credit reports are available under Federal law at: AnnualCreditReport.com."

      Sneaky, in that they still have the warning, but it's much less noticeable now.


      No, apparently that's the banner they've been using more regularly, but the gray one you see above is the one they're "testing" as they get ready for an April 1 deadline when they need to be a lot clearer.

      link to this | view in chronology ]

      • identicon
        Anonymous Coward, 3 Mar 2010 @ 9:53pm

        Re: Re:

        "as they get ready for an April 1 deadline"

        What is this, some sort of April Fools joke?

        link to this | view in chronology ]

  • identicon
    Ryan, 3 Mar 2010 @ 10:37am

    It's about time...

    that the dumbass members among the American public realize that if you're expecting it to be free, don't give out your credit card number.

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Mar 2010 @ 10:58am

    I was wondering what was up with that - the last time I saw one of their TV commercials, I saw some text at the bottom of the screen - "Not the free credit report provided under Federal law" or something along those lines.

    Now if only we could get the commercial to follow the pattern in drug commercials - 15 seconds describing the free credit report, and 45 seconds describing the nasty side effects this "free" credit report will have on your wallet.

    link to this | view in chronology ]

    • icon
      Jon Renaut (profile), 3 Mar 2010 @ 11:12am

      Re:

      That's a good parallel. Taking crazy drugs they advertise on TV can have tons of awful side effects, and signing up for FreeCreditReport.com shows Experian that you don't read the fine print, and are therefore probably a higher credit risk.

      link to this | view in chronology ]

      • icon
        Designerfx (profile), 3 Mar 2010 @ 11:30am

        Re: Re:

        FDA and FCC already made regulations for that. Have you tried to keep up with the red bull or 5 hour energy ads on tv?

        it's like "no crash means no sugar crash" (aka you still caffeine crash) and stuff like "not FDA approved" and "this may be dangerous for your health".

        link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Mar 2010 @ 11:08am

    ftc.gov

    I guess this still needs to be said: Goto ftc.gov and look for "Free Credit Reports".

    Not sure if they should make it easier to pick out the link.

    link to this | view in chronology ]

  • icon
    Chris ODonnell (profile), 3 Mar 2010 @ 11:19am

    Damn you Mike, now I have their stupid song stuck in my head :)

    link to this | view in chronology ]

    • icon
      Grae (profile), 3 Mar 2010 @ 12:14pm

      Re:

      On that topic: while their advertising and business practices are pretty sketchy--in the past I've read dozens and dozens of people saying how difficult it was to actually cancel their subscriptions for Experian's "Triple Advantage" program despite multiple attempts to cancel--I think their commercials are something that holds up pretty well to the content-is-advertising/advertising-is-content model that Mike talks about.

      The commercials are catchy, humorous, and the musicians in them always look like they're enjoying themselves. All in all, they're pretty fun to watch.

      link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Mar 2010 @ 11:35am

    The sad thing is that 99% of the credit fraud would go away if the credit reporting agencies didn't exist. Sure they make it quicker to get approved for a loan, but they also enable crooks with a name, birthdate, and ssn to get rich and screw innocent people. I wish laws would protect my credit information from being shared with criminals like equafax, experian, etc. Their sharing of personal private information is a lot more of a invasion of privacy to me, than having someone find out I had a cold in march, have high blood pressure, and never had an std.

    link to this | view in chronology ]

    • icon
      Grae (profile), 3 Mar 2010 @ 2:07pm

      Re:

      99% of credit fraud is facilitated by the services that credit reporting agencies provide? Really? Can you provide a source for this data? Otherwise it just looks like a number made up to support your own opinion of the credit reporting agencies.

      Also it's fantastic that for you personal health info is not something you care about. However, you represent approximately 0.0000000014692409430778340298156402694208%* of the world's human population and given the lawsuits and legislation that has gone into protecting personal health info, one would have to be willfully ignorant to claim that it's a lesser invasion of privacy than the collection of financial info.

      So that example is not very effective in supporting your claim that the credit agencies should be disbanded.

      *Source: http://www.census.gov/main/www/popclock.html

      link to this | view in chronology ]

  • icon
    Overcast (profile), 3 Mar 2010 @ 11:46am

    About time. That site was a big scam, when you tried to cancel your account with them, the only way was to actually call them and deal with them hassling you about it.

    link to this | view in chronology ]

  • identicon
    taoareyou, 3 Mar 2010 @ 12:08pm

    They still make it near impossible

    I went to get my free credit report. I got sent to the Trans Union site. I put in all my info, address, SSN, etc. They proceed to "verify my identity" by asking me some questions from my credit history. I had to select jobs I've worked at from a list. Easy.

    But then they asked me to select credit accounts I have from a list. I didn't recognize any of them. Next they asked me to identify from a list which accounts I have applied for credit with in the past 2 years. None of them rung a bell.

    So they said we can't verify you. We will call you. Choose from one of these numbers. I have had my current cell # for about 2 years (switched providers, number didn't port, long story, but I got a new # a few years ago). Of course, it wasn't on the list.

    They certainly know my current address and could easily send my requested report to me at my current address. Instead they make you jump through all these "security" hoops that the average person will not be able to answer. My only other option is to send a request via mail (although I don't see how that is more secure, since I still won't know the answer to all their questions).

    I won't be paying them, but I would wager that if I DID pay them, it would be a hell of a lot easier to get my credit report.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Mar 2010 @ 12:13pm

      Re: They still make it near impossible

      What's especially curious is that from the list of phone numbers (of which they just give the last 4 digits), only one of them I recognized, and it was my old cell. Everyone I have done business with for the past 2 years has my new cell phone. Which would include any new credit applications I've made during that time (none of which I could identify). However the phone number I have used on all credit apps for the past 2 years is conveniently NOT in the call back verification list.

      link to this | view in chronology ]

    • identicon
      Adam, 4 Mar 2010 @ 8:34pm

      Re: They still make it near impossible

      It's not that hard to get, honestly. I've helped a lot of people get their free reports from annualcreditreport.com. Very rarely have I had any problems.

      In your circumstance, I'd be concerned that you are a victim of identity theft or your file is merged somehow. You should recognize everything from the questions if it is your credit information.

      link to this | view in chronology ]

  • icon
    Paul (profile), 3 Mar 2010 @ 12:30pm

    Are we sure Credit numbers even mean anything?

    I have often wondered about this. I know people that have great credit scores, and I know other people with poor credit scores. Not all of the first folks would I lend money to, and quite a number of the latter are totally solid.

    I have done searches in the past for actual third party, independent studies done to prove that these "credit scores" (that are so central to what interest rates people pay, and who banks will loan money to) actually measure the risk of a loan.

    A real study would (I believe) show that credit scores are in reality a terrible measure of risk. They are instead a way for banks, insurance companies, etc. to collude with each other on interest rates, insurance rates, etc.

    Obviously if someone has walked away repeatedly from debts, their scores are going to tank and they are a poor risk. But the guy that is late a few times on a payment, (particularly a mortgage payment) or has refused to pay a fraudulent bill or charge isn't necessarily a bad risk.

    But I don't think these credit score companies make any real effort to investigate issues like these. It isn't in their interests to do so, as they get paid for their reports regardless of what kind of crap on an individual they are serving up. Banks don't care, because inaccurate reports (they are most certainly never "inaccurate" in favor of the individual) just mean that they charge individuals for being "risky" when in fact they are not (can you say free money?).

    The government obviously can't make them do their job. They can't even make them adhere to some basic ethical guidelines (per the story here).

    So why do we as citizens allow this farce to continue to soak the public? It isn't anything other than a thinly veiled tax on everyone getting a loan, paid to one, two, or three government sanctioned monopolies, whose product is a means for banks to collude together to jack a significant percentage of the population.

    link to this | view in chronology ]

    • icon
      Nastybutler77 (profile), 3 Mar 2010 @ 3:25pm

      Re: Are we sure Credit numbers even mean anything?

      Yes they are necessary. You think banks aren't lending much now? Eliminate credit scoring and nobody without verifiable collateral and assets will get a dime from them, or other businesses who extend credit.

      I'm a credit manager for a electrical distributor and without Experian and other credit report agencies my company would have a hard time extending any credit to any small business. And those trying to start up a small business? Forget it.

      link to this | view in chronology ]

  • icon
    Hulser (profile), 3 Mar 2010 @ 12:47pm

    How exactly are Experian's ad misleading?

    The FTC has been battling Experian and the other rating agencies for years over this blatantly misleading advertising.

    Mike, that's a strong statement, but I don't see any justification for it in your post. (Maybe the proof is in some of the linked articles?) How exactly are Experian's ads misleading? Maybe Experian makes it overly difficult to cancel the required subscription service, but that seems to be a separate issue as to whether the actual ads are misleading. But FreeCreditReport.com actually does provide a free credit report.

    Are you saying that because they don't tell its customers that the governemnt has a free credit report web site that doesn't have the subscription requirement, their ads are misleading? If that were the case, then every single commercial for bottled water would be misleading because they don't have warnings about how you can get (nearly) free water from your own tap.

    link to this | view in chronology ]

    • icon
      taoareyou (profile), 3 Mar 2010 @ 1:04pm

      Re: How exactly are Experian's ad misleading?

      It's misleading because the public is generally aware they can get a yearly free credit report. The website claims it will give you a "free" credit report however it is not free. FREE means, I don't have to make a financial transaction. Free means, I ask for something you are providing and you give it to me with no strings or further obligations.

      If I told you I would wash your car for free, but then when you said OK I said well, you do have to sign this agreement that you will continue to let me wash your car, as well as check your oils and other liquids and you will have to pay me to do so, it's not really free is it? You can back out of it, sure, but you have to come to my house and go through a special obstacle course first, before I will let you out of the contract.

      Oh yeah, and there's a kid down the street who will wash your car once a year for really free, but that's not really worth it.

      link to this | view in chronology ]

      • icon
        Hulser (profile), 3 Mar 2010 @ 1:51pm

        Re: Re: How exactly are Experian's ad misleading?

        Free means, I ask for something you are providing and you give it to me with no strings or further obligations.

        You must live a very sheltered life to have this definition. There's the literal definition of free and there's the definition that everyone but the most niave understand to mean when they here "free" in the context of an advertisement. When the bank gives you a "free" toaster, they require you to sign up for an account. When the car dealership gives you a "free" ticket to the local professional sports team, they require you to take a test drive first. When the timeshare gives you a "free" weekend, they require you to sit through a seminar. There's no such thing as a free lunch, as they say.

        If I told you I would wash your car for free, but then when you said OK I said well, you do have to sign this agreement that you will continue to let me wash your car, as well as check your oils and other liquids and you will have to pay me to do so, it's not really free is it

        No, not really. Not literally. But in the context of advertising and the business world, this kind of arrangement is very common. If you're going to pick on Experian, then you'd have to hold every other single company to this same standard.

        link to this | view in chronology ]

        • identicon
          Bear, 3 Mar 2010 @ 5:16pm

          Re: Re: Re: How exactly are Experian's ad misleading?

          Just because you have become accustomed to, and are willing to lie down for, a patently misleading use of a known word, under the premise that it's common practice in business, means nothing.

          "If you're going to pick on Experian, then you'd have to hold every other single company to this same standard."

          I do.

          link to this | view in chronology ]

          • icon
            Hulser (profile), 3 Mar 2010 @ 7:47pm

            Re: Re: Re: Re: How exactly are Experian's ad misleading?

            Just because you have become accustomed to, and are willing to lie down for, a patently misleading use of a known word, under the premise that it's common practice in business, means nothing.

            Agreed. It's a good thing then that I'm not the only one who has become accustomed to this. Most people of a certain level of experience understand that a bit of stretching the truth in advertising is common practice. It's not just me; it's most of the population of the planet. Also, as I pointed out in another thread, I'm not saying this is right. Sure, in a perfect world, advertisers would be held accountable to the literal truth and there'd be no exageration or hyperbole in ads. But this isn't going to happen. So, feel free to tilt at windmills in your quest for utter truth in advertising while the rest of us lie down and take it. Personally, I think it'd be much more effective to focus in on cases where advertisers cross the line, even if this means there's some subjective debate on where to draw the line.

            link to this | view in chronology ]

        • identicon
          Anonymous Coward, 3 Mar 2010 @ 7:36pm

          Re: Re: Re: How exactly are Experian's ad misleading?

          Apparently, the FTC has lived a very sheltered life as well, then. If you are going to hold me to a standard, you have to hold everyone who thinks as I do to the same standard. :)

          link to this | view in chronology ]

          • icon
            Hulser (profile), 3 Mar 2010 @ 7:58pm

            Re: Re: Re: Re: How exactly are Experian's ad misleading?

            Apparently, the FTC has lived a very sheltered life as well, then.

            Rather than a blanket defence of Experian, my question was merely meant to point out that the justification for Mike's strong statement was not actually included in the main text of the post. There very well could be mitigating circumstances that set Experian apart from your run-of-the-mill exagerations in advertising and warranted the action of the FTC.

            I understand that Mike uses links to his previous posts and to other sites as a means to provide additional background on a particular topic. But in my opinion, when you make a statement as strong as he did in the post, you should include the justification for that statement in the main text of the post.

            link to this | view in chronology ]

    • identicon
      Simple Mind, 3 Mar 2010 @ 1:13pm

      Re: How exactly are Experian's ad misleading?

      Maybe Experian makes it overly difficult to cancel the required subscription service, but that seems to be a separate issue as to whether the actual ads are misleading. But FreeCreditReport.com actually does provide a free credit report.

      I don't consider it to be free if I have to buy their service in order to get it, even if it is possible to cancel it later. I don't know of any dictionary that would consider that "free" either. Making it difficult to cancel moves it into the realm of "scam".

      link to this | view in chronology ]

      • icon
        Hulser (profile), 3 Mar 2010 @ 2:30pm

        Re: Re: How exactly are Experian's ad misleading?

        I don't consider it to be free if I have to buy their service in order to get it, even if it is possible to cancel it later.
        You may not, but this arrangement is quite common. For example, a popular geneology web site offers two week's "free" access to their archives if you sign up for their service and cancel before the two weeks is over. If you don't, then you get charged. Yes, there are strings attached, but I think almost everyone who sees the word "free" in an add understands that there will be strings.

        Making it difficult to cancel moves it into the realm of "scam".

        For the sake of argument, let's say that Experian does in fact make it overly difficult to cancel the mandatory subscription. Do you know that this is the reason Mike says the ads are misleading? My point is that if you are going to make such a strong statement, it would be proper to explain the justification in the post rather than relying on the reader to follow the included links or to leave it to the imagination of the reader.

        link to this | view in chronology ]

        • icon
          Nastybutler77 (profile), 3 Mar 2010 @ 3:18pm

          Re: Re: Re: How exactly are Experian's ad misleading?

          Do you work for Experian? Methinks thou doth protest too much.

          link to this | view in chronology ]

          • icon
            Hulser (profile), 3 Mar 2010 @ 7:36pm

            Re: Re: Re: Re: How exactly are Experian's ad misleading?

            Do you work for Experian?

            No. Do you always jump to wild conclusions?

            link to this | view in chronology ]

        • identicon
          Any Mouse, 3 Mar 2010 @ 6:49pm

          Re: Re: Re: How exactly are Experian's ad misleading?

          Just because it is common does not make it /right/. It moves further into the realm of scam, however, in not making the required subscription as apparent as it should, something that they only started doing quite recently.

          Now, if they came out and said 'sign up with our monitoring service, and we'll give you a free report,' that would be different. But they don't. Even know it's a low-volume blurb that goes by so fast most aren't certain of what they heard.

          link to this | view in chronology ]

          • icon
            Hulser (profile), 3 Mar 2010 @ 7:28pm

            Re: Re: Re: Re: How exactly are Experian's ad misleading?

            Just because it is common does not make it /right/.

            Agreed. But what does that have to do with the topic? I didn't say it was right; I said it wasn't misleading. Unless you're very young or sheltered, you probably know that advertisers exagerate and bend the definition of terms like "free". Is this morally right? No. Are there points where advertisers cross the line? Sure. (Case in point: "unlimited Internet access".) But you can't define "misleading" in absolute terms. It has to be in the context of the understanding of the advertisees.

            link to this | view in chronology ]

  • identicon
    Simple Mind, 3 Mar 2010 @ 1:03pm

    what about the other one

    There seems to be another company doing the same thing. You know, the one with all the Ben Stein (***hole) commercials. When is the FTC going to go after them? (And hopefully get Ben's lying mug off my TV!)

    Also, annualcreditreport.com does not give your FICO score for free. The info you get is nice and useful, but the FICO score is what you need. The 3 agencies still hold that hostage for about $7-8 last time I checked.

    Next thing FTC should go after is all these cash-for-gold scams. "Send in your gold and for a limited time get %30 more." 30% more than what? It is sad that our species is too stupid to see through this crap.

    link to this | view in chronology ]

  • icon
    AJ (profile), 3 Mar 2010 @ 1:15pm

    Why wasn't it a .gov address?

    The FTC really didn't think this through when they set up the site in the first place; if they has used a .gov address instead it would have made it much easier for people to recognize when they're using the right address.

    link to this | view in chronology ]

  • icon
    Allen Harkleroad (profile), 3 Mar 2010 @ 1:23pm

    It's About Time

    I am so sick of seeing those Free Credit Report commercials, the guy can't even freaking sing. Worse is they claim "free" when it's not. They should have been shut down or forced to be honest about it years ago.

    link to this | view in chronology ]

    • identicon
      2gravey, 3 Mar 2010 @ 2:02pm

      Re: It's About Time

      I can't stand those stupid commercial either. The worst part to me is that the whole point of the commercial is to suggest that just knowing your credit score will somehow allow you to afford a better car, cellphone, or place to live. If your credit is really as bad as the guy on the commercial's, knowing the score will do nothing but make you depressed.

      link to this | view in chronology ]

      • icon
        John Fenderson (profile), 4 Mar 2010 @ 12:37pm

        Re: Re: It's About Time

        I agree that the ads (and the "service") are a scam, but...

        "The worst part to me is that the whole point of the commercial is to suggest that just knowing your credit score will somehow allow you to afford a better car, cellphone, or place to live."

        Actually, this often is the case -- many studies have shown that a large percentage, perhaps a majority, of people have black marks on their credits reports that shouldn't be there (odd that there's never an erroneous GOOD mark on those reports) and their scores are therefore lower than they should be.

        Knowing this gives you the opportunity to correct the errors and may very well let you qualify for loans you would otherwise not have qualified for.

        Not that anyone should be buying optional goodies with loans, of course. That's a whole 'nother scam.

        link to this | view in chronology ]

  • identicon
    TSFL Pyramid, 4 Mar 2010 @ 7:11am

    FTC and More Scam Advertising from Medifast

    Medifast is another Company that engages in such deceptive advertising: everywhere on the internet ads are displayed with 20,000 doctors recommending since 1980.........what Medifast does not say is how many doctors exist today recommending Medifast given the Company was in bankruptcy during the 1990s and sued numerous times over product defectiveness. And the Company is publicly traded on the New York Stock Exchange so despite millions of dollars spent on advertising 20,000 doctors- no disclosure is made on what exists today- what a scam.

    link to this | view in chronology ]

  • identicon
    Codi, 12 Apr 2010 @ 4:09am

    If you need 100% free credit report

    If you need 100% free credit report go to that site:

    http://CreditReportFrees.info

    They also offer credit monitoring, anti fraud alert ...

    This it top rated site for credit report.

    link to this | view in chronology ]

  • identicon
    MyCreditReportInstant, 21 Jul 2010 @ 2:44am

    Thank you for share. This information is useful for me.

    link to this | view in chronology ]


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