From now on, print and Internet ads for FreeCreditReport.com will have a new look. Under a settlement with the Federal Trade Commission, advertisers of commercial credit reporting services must point out to consumers they aren't the free service required by law.
Broadcast ads must carry the disclaimer later this year.
Federal law allows consumers to obtain free copies of their credit report from all three credit reporting agencies once a year. That free access is available at AnnualCreditReport.com, or by calling 877-322-8228.
Not necessarily free
But consumers are easily confused when they see commercials for FreeCreditReport.com and other services that sound like they're a free service.
While you can get a free copy of your Experian credit report from FreeCreditReport.com, for example, the company makes its money by enrolling you in a credit monitoring service that carries a monthly fee. Some consumers misunderstand that. Even those that don't, and try to cancel the service within the "trial" period, often have a hard time.
"I signed up for a free credit report June 8, 2009," Art, of Spring Hill, Fla., told ConsumerAffairs.com. "If you cancelled the service within seven days, there would be no charge. I cancelled the service after receiving my free reports on June 10. On June 11, my credit card was charged $14.95."
Clarity in ads
Under the Federal Trade Commission's amended Free Credit Reports Rule, which went into effect April 2, ads for these "free" offers must have clear disclosures. For example, Web sites offering free credit reports must have a disclosure, across the top of each page that mentions free credit reports, with links to AnnualCreditReport.com and FTC.gov.
The amended Rule also requires nationwide consumer reporting agencies -- Equifax, Experian, and TransUnion -- to delay advertising for products or services on AnnualCreditReport.com until after consumers get their free credit reports.
Broadcast disclaimer delayed until Sept. 1
The amended Rule is effective for Internet ads, with the wording of disclosures for television and radio ads taking effect on September 1, 2010.After September 1, TV ads for credit report services must include the following disclosure in close proximity to the first mention of a free credit report: "This is not the free credit report provided for by Federal law."
The disclosure must appear at the same time in the audio and visual part of the advertisement and the visual disclosure must be at least four percent of the vertical picture height and appear for a minimum of four seconds.
Advertisements broadcast on radio must include the disclosure ''This is not the free credit report provided for by Federal law.' in close proximity to the first mention of a free credit report.
"Information in credit reports may affect whether consumers can get a loan or a job, so it is important for consumers to check their reports and correct any inaccurate information," the FTC said in a statement.
Each of the nationwide credit reporting companies is required to provide consumers with a free copy of their credit reports once every 12 months upon request.
