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Archive for Friday, March 5, 2010

Law simplifies access to free credit reports

March 5, 2010

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— Beginning April 1, when you go online to view your federally mandated free annual credit reports, you’ll get exactly what you came for. Hopefully.

The Credit CARD Act of 2009 required the Federal Trade Commission to issue new rules to prevent deceptive marketing of the free reports generated by each of the three national credit bureaus — Equifax, Experian and TransUnion.

Since the Fair and Accurate Credit Transactions Act was signed into law in 2003, there has been a lot of confusion among consumers about which site provides official reports. The commercials for freecreditreport.com with the curly haired guitar-playing guy haven’t helped either.

Heck, even until April 1, people still have to go through a gantlet of advertising before being allowed to their free reports on annualcreditreport.com.

At that site, you must read carefully lest you be diverted to the Web sites for the bureaus. On the official site, bold red lettering says: “Start here to view and print your credit report now.” You must select the state you live in to begin the process.

But some people assume they should click on the credit bureau links below that wording. Once on the sites for TransUnion, Experian or Experian, you encounter marketing pitches for various products or services, including the ability to buy your credit score.

Credit scores differ from your credit report, which contains your credit history. The scores are used to determine how creditworthy you are. There is no requirement for the bureaus to provide free credit scores.

There’s another opportunity to get misdirected — sales pitches from the credit bureaus. People have to decline the offers one by one before getting to their free reports.

But next month, the advertising has to be moved to the end of the free credit report process.

In the Federal Register notice about the rule changes, the FTC said a ban is more restrictive than necessary at this time but that it will monitor the required disclosures. If the commission finds that the delayed advertising still results in significant confusion, the agency says it will revisit the issue.

At least after the new rule becomes effective, the hyperlinks on the home page for annualcreditreport.com will be taken down. This will go a long way to keep people on the right site.

On another front, to help keep people from ending up on fake sites or falling for certain promotions, the FTC will now require new prominent disclosures on Web sites pitching free credit reports. Many companies claim to offer a free credit report, but to get it you have to buy a product or service.

Let’s look at one site that often confuses people. Last time I visited freecreditreport.com, I saw this notice at the top of the home page — “Free credit reports are available under Federal law at: AnnualCreditReport.com.”

That wording isn’t going to be good enough under the new rule. Any commercial Web site offering free credit reports must include a specific disclosure across the top of every page that includes the following language: “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 amended rule on advertising won’t immediately apply to the wording of disclosures for television and radio advertisements. Companies have until Sept. 1 to add clearer language in those ads.

Here’s a direct link — ftc.gov/freereports — to file a complaint if you paid for what you thought was your free annual credit report. If you get your credit reports after the new rules apply and encounter a problem, let the FTC know.

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