Given the continuing credit crunch and the efforts of many consumers to dig themselves out of a financial hole, the offer of a "free credit report" provides a tempting opportunity to see just how deep that hole is.

Unfortunately, such offers are almost never what they seem, a truism reaffirmed by a class action lawsuit filed last week. The suit, filed in New Jersey state court, claims Experian's and both offer a "free credit report," but provide it only if consumers agree to purchase a credit monitoring service.

The complaint says the caveat violates New Jersey's Consumer Fraud Act (CFA) and the state's Truth-in-Consumer Contract, Warranty, and Notice Act (TCCWNA). The CFA prohibits sellers from making fraudulent or misleading statements about the product or service they are selling. The TCCWNA, in turn, prevents a seller from including in a contract any provision that violates another law -- in this case the CFA.

According to the complaint, lead plaintiff Melissa Toll logged onto last December to get a copy of her credit report and credit score. Toll didn't realize, however, that she was also signing up for the "Triple Advantage" credit monitoring service, which costs $14.95 per month unless the consumer cancels it within seven days.

The suit contends that, understandably, Toll "believed that the 'free' credit report offered by Defendants...and repeatedly referred to as 'free' by the Defendants, would in fact be free of charge."

Fortunately for consumers, a new federal law passed in the months since Toll signed up for her credit report prohibits the very conduct referenced in the suit. The Free Credit Reports Rule, implemented by the Federal Trade Commission (FTC) in April, requires creditors to clearly disclose any conditions attached to the offer of a free credit report.

Both and now contain such a disclosure. warns consumers that: "When you order your free report here, you will begin your free trial membership in Triple Advantage Credit Monitoring. If you don't cancel your membership within the 7-day trial period, you will be billed $14.95 for each month that you continue your membership." has received a considerable number of complaints about, many of which tell a story similar to Toll's.

The suit requests an injunction barring future violations of CFA and TCCWNA, disgorgement of fees collected by Experian, "maximum statutory damages," and attorneys' fees. The suit also asks for CFA-authorized "treble damages," which allow a court to "award threefold the damages sustained" by a plaintiff.

Under federal law, consumers are entitled to free government-provided credit reports once every year. Those reports can be obtained at, the FTC's website or by calling 877-322-8228.