Consumerinfo.com, Inc., doing business as Experian Consumer Direct, has settled Federal Trade Commission charges that it deceptively marketed “free credit reports” by not adequately disclosing that consumers automatically would be signed up for a credit report monitoring service and charged $79.95 if they didn’t cancel within 30 days, in violation of federal law. The settlement requires Consumerinfo to pay redress to deceived consumers, bars deceptive and misleading claims about “free” offers, requires disclosure of terms and conditions of any “free” offers, and requires the defendant to give up $950,000 in ill-gotten gains.
According to the FTC complaint, the defendant drove consumers to their www.freecreditreport.com and www.consumerinfo.com Web sites with radio, television, e-mail and Internet ads that promised free credit reports and a bonus – free trials of a credit-monitoring service. Ads made claims such as:
FREE! FREE! FREE! Get Your FREE Credit Report Online in Seconds!!!!Click here to get a FREE copy of your online Credit Report Instantly!And that’s not all. . . along with your INSTANT credit report, we’ll giveyou 30 FREE days of the Credit Check Monitoring Service at no obligation.
Consumers were required to provide detailed personal information and a valid credit card account number to get their credit report. They were assured that, “Your card will not be charged during the free trial period. However, valid credit card information is required to establish your account.”
According to the FTC’s complaint, Consumerinfo’s advertising and Web sites failed to explain adequately that after the free trial period for the credit monitoring service expired, consumers automatically would be charged a $79.95 annual membership, unless they notified the defendant within 30 days to cancel the service. Consumerinfo billed the credit cards that it had told consumers were “required only to establish your account,” and, in some cases, automatically renewed memberships by re-billing consumers without notice. The FTC charged that the defendant’s failure to adequately disclose the automatic billing and to get consumers’ consent to bill their accounts violated federal law.
The complaint also alleges that Consumerinfo misled consumers about their association with the annual free credit report program for which U.S. consumers are eligible by federal law. A federal law enacted in December 2003, gives consumers the right to get one free credit report every 12 months from each of the three national consumer reporting companies. This program began in western states on December 1, 2004, and began covering all U.S. consumers September 1, 2005.
Consumers can get their free reports by phone, mail, or at one authorized Web site, www.annualcreditreport.com. The FTC complaint alleges that Consumerinfo deceptively advertised and promoted its “free reports” at its “freecreditreport.com” Web site, without disclosing that it was not associated with the official annual free credit report program.
“Consumers paid the price for ordering free credit reports from freecreditreport.com,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “It’s unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn’t want in the first place.”
“Consumers also need to be alert about impostor sites – sites that misspell annualcreditreport.com or use sound alike names, but don’t link to the authorized site. We are sending letters to operators of more than 130 impostor sites to inform them that we know they are out there and that attempts to mislead consumers are illegal,” she said. The settlement is designed to assure that the defendant’s negative-option or “free” offers do not contain misrepresentations, and that they disclose all terms and conditions of the offers. The settlement establishes specific disclosure requirements in promotions for the defendant’s “free credit report” offer. Among other things, the defendant must clearly tell consumers that they will be charged unless they cancel within the trial period, and that the offer is not related to the free credit report program mandated by Congress.
The settlement requires redress for consumers who enrolled in Consumerinfo’s credit monitoring program between 2000 and 2003, canceled the monitoring service and received a partial refund or filed a complaint about the charges for the service. Consumers who qualify for a refund should receive a notice from Consumerinfo by email or first class mail within the next few months. The FTC staff has released answers to frequently asked questions available at www.ftc.gov/freereports to help Consumerinfo customers determine if they’re eligible for a refund. It also has established an information hotline for consumers to call for information on refunds. The phone number is (202) 326-3457.
In addition to the redress program, the settlement requires the defendant to pay $950,000 in ill-gotten gains to the Commission. The money may be used to provide consumer education.
The settlement also contains record-keeping and bookkeeping provisions to allow the FTC to monitor compliance with the order.
Posted under Customer Service
This post was written by George Bounacos on September 9, 2005
I WORK FOR A CALL CENTER THAT HELPS INDIVIDUALS SOVE ALL SORTS OF ISSUES INVOLVING THEIR CREDIT INFORMATION THROUGH ALL THREE MAJOR CREDIT BUREAUS. YOU WILL BE SURPRISED AT HOW MANY PEOPLE DO NOT KNOW ABOUT THEIR RIGHTS UNDER THE FCRA. MOST PEOPLE I TALK DO NOT KNOW THAT UNDER THE LAW THEY ENTITLED TO ONE FREE CREDIT REPORT A YEAR FROM EACH OF THE BUREAUS AND SOME STATES IT IS TWO, LIKE GEORGIA. PERHAPS MAYBE THE FEDERAL COULD DO A MUCH BETTER JOB AT EDUCATING THE GENERAL PUBLIC ON THIS RIGHT AND ALL THE RIGHTS UNDER THE FCRA. ALSO MAYBE IF THERE WASN’T CONFUSION OVER CREDIT SCORES AND FOCUS PLACED ON THE ACCURACY OF INFORMATION CONTAINED WITHIN ONE’S CREDIT FILE. CREDIT SCORES ARE JUST NUMBERS WHICH ARE BASED ON THE DATA WITHIN THE REPORT. LET’S PLACE MORE FOCUS ON THE REAL ISSUE AT HAND, THE DATA ON ONE’S CREDIT REPORT. QUIT CONFUSING PEOPLE OVER THE CREDIT SCORE, IT IS JUST A NUMBER. ALSO LET’S STOP THE PRACTICE OF CREDIT AGENCIES AND BUREAUS SELLING ACCOUNTS JUST KEEP THEM CURRENT. ALL THIS DOES IS LOSE ORIGINAL BILLING PERTAINING TO OWED WHICH MAKES IT HARDER FOR CONSUMERS TO VALIDATE THEIR DEBTS. UNDER THE LAW, UNDER THE LAW ACCOUNTS WHETHER THEY ARE OPEN,CLOSED, CURRENT, OR DILIQUENT ARE GE ERASED FROM THE CREDIT PROFILE AFTER 7 YEARS. HOWEVER THE PRACTICE, OF SELLING ACCOUNTS FROM ONE COMPANY TO ANOTHER CAUSES CONFUSION AND CONTRIBUTES TO THE HIGH BANKRUPTCY RATE THAT WE ARE SEEING IN AMERICA TODAY.
IN ADDITION TO MY PREVIOUS NOTE, CONSUMERS NEED TO BE A LITTLE MORE RESPONSIBLE AND TAKE RESPONSIBILITY FOR THEIR ACTIONS. EVERY DAY, PEOPLE TELL ME THAT THEY WEREN’T AWARE THAT THEY WERE GOING INCUR CHARGES ON THE CREDIT CARDS FOR THIS OR THAT. POEPLE, USE YOUR READING SKILLS AND MAKE SURE YOU READ THE FINE PRINT, MAKE SURE YOU UNDERSTAND WHAT YOU ARE DOING, VERY LITTLE IN SOCIETY TODAY IS FREE, MOST EVERYTHING COST SOMETHING. DON’T BLAME OTHERS FOR YOUR IGNORANCE AND STUPIDITY BECAUSE YOU FAIL TO USE A SKILL THAT YOU SUPPOSEDLY LEARN IN ELEMENTARY SCHOOL. IF YOU DON’T UNDERSTND, DON’T AGREE TO NOTHING UNTIL YOU GET CLARIFICATION, ASK, MAKE A TELEPHONE CALL, ESPECIALLY WHEN IT COMES TO THE WORLD WIDE WEB. GET EDUCATED, KNOW WHAT ARE DOING, FULLY UNDERSTAND WHAT ARE AUTHORIZING OR AGREEING TO. TAKE RESPONSIBILITY FOR YOUR ACTIONS AND STOP PLAYING STUDID. WHEN IT DOUBT, ASK ABOUT. GET ALL THE FACTS!!!