The Federal Trade Commission wants to prevent the deceptive marketing of "free credit reports." In October, it announced new guidelines known as the Free Annual File Disclosures Rule, and now the FTC has extended the public comment period on the new rule, now called the Free Credit Report Rule, to December 7. The deadline was extended in response to a request by the Illinois Attorney's General's Consumer Protection Division because it needs more time to "compile data and file comprehensive comments." If you would like to comment on the proposed rule, you can do so at the FTC website.
The rule was developed after passage of the Credit Card Act of 2009, which requires the Commission to issue a rule to prevent deceptive marketing by February 22, 2010. The Act requires that certain advertisements for "free credit reports" include prominent disclosures designed to prevent consumers from confusing these "free" offers with the federally mandated free annual credit reports available through the centralized source, AnnualCreditReport.com, or by calling 877-322-8228.
The Commission's new rule proposes disclosures for television, radio, print, Internet and other media in which "free credit report" advertising may occur, along with requirements to ensure that the disclosures are sufficiently prominent. For example, for any Internet site offering free credit reports, the Commission proposes a requirement that, before the consumer may obtain a credit report from that website, such site must first display a separate landing page with the required disclosure: "This is not the free credit report provided for by Federal law. To get your free report, visit www.AnnualCreditReport.com or call 877-322-8228."
In addition, the Commission proposes an amendment to the Free Annual File Disclosures Rule to restrict practices that may confuse or mislead consumers as they attempt to obtain their free credit reports through the centralized source. For example, when you use the official site, www.AnnualCreditReport.com, you are subjected to substantial amounts of advertising from the nationwide consumer reporting agencies as you attempt to obtain free annual credit reports from each of the credit reporting agencies. You really have to play a game of hide and seek to find the official link for the free report as the credit reporting agencies try to sell you their monitoring services.
The Commission reports that it has received consumer complaints about promotions for products and services that confuse and frustrate consumers. The Commission proposes to amend the Rule by delaying such advertising until after consumers obtain their free annual credit reports.
If you've ever gotten stuck with a credit monitoring service you didn't want just because you signed up for a free credit report, let the FTC know by commenting on the proposed rule. The more consumers they hear from the better chance we'll have that this proposed rule becomes permanent law.
Lita Epstein has written more than 25 books, including The Complete Idiot's Guide to Improving Your Credit Score.