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Consumerinfo.com, doing business as Experian Consumer Direct, will pay $300,000 to settle Federal Trade Commission charges that ads for its “free credit report” offer failed to disclose adequately that consumers who signed up would be automatically enrolled in a credit- monitoring program and charged $79.95. The FTC alleged that the failure to clearly disclose the enrollment and charges violated a previous settlement.

In August 2005, Consumerinfo.com, paid $950,000 to settle FTC charges that it deceptively marketed “free credit reports.” According to the FTC, Consumerinfo offered consumers a free copy of their credit report and added that they would provide “30 FREE days of Credit Check Monitoring.” The FTC alleged that 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. In addition to the $950,000 payment, the settlement required Consumerinfo to pay redress to deceived consumers, barred deceptive and misleading claims about “free” offers, and required clear and conspicuous disclosure of terms and conditions of any “free”offer.

The FTC alleges that Consumerinfo.com ran ads after the settlement that violated the disclosure requirement. The settlement requires Consumerinfo to give up $300,000 in ill-gotten gains, and bars it from misrepresenting any affiliation with the annual credit report available to consumers under the Fair Credit Reporting Act.

The stipulated judgment and order named Consumerinfo.com, Inc., doing business as Experian Consumer Direct, Qspace, Inc., and Iplace, Inc.

The Commission vote to accept the supplemental stipulated judgment and order was 5-0. It was filed in United States District Court for the Central District of California in Los Angeles.

NOTE: Stipulated judgments and orders for permanent injunction and monetary relief are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Stipulated judgments have the force of law when signed by the judge.

Posted under Customer Service, Finance

Consumers for years have tangled with the three major U.S. credit bureaus because of inconsistent or sometimes inaccurate data. A fourth company actually introduced a credit scoring system using data from the information companies to attempt to predict the creditworthiness of a loan or other obligation.

Now the credit bureaus - Equifax, Experian and Trans Union - are fighting back. They have introduced a new scoring system that makes use of a different scale. The industry standard, known as a FICO score since it was created by Fair, Isaac Corporation, used an 850 point scale. The new program, called VantageScore, uses a 990 point scale.

“The truth is that there were always inconsistencies between the different bureaus’ reports,” said Consumer Help Web President Joan Bounacos. “We simply wish they had entered into an agreement with Fair, Isaac so that consumers were not confused by knowing whether a particular number was good or bad.”

Consumers are entitled to receive a free credit report each year, and some industry experts have expressed concern that the VantageScore, which can be sold, is an attempt to generate more consumer revenue. “We know that they have to make the data available,” Bounacos said. “But now they can simply say that that they have complied by supplying the raw data.”

Fair, Isaac had previously released proportional information that told consumers how their actions could impact their credit score. VantageScore, which is a separate commercial entity owned jointly by the credit bureaus, has released more information, but consumer advocates say the data is harder for consumers to understand and may lead to differing conclusions.

“No one is going to share their secret formula, nor should they,” Bounacos said. “But to help consumers improve their credit, VantageScore should release at least the proportion of different actions that go into computing the score. Nothing will be gained by hiding this information from consumers.”

Posted under Finance

GUS plc, the mammoth UK company that owns credit reporting agency Experian among other entities, has gobbled up PriceGrabber.com, a comparison shopping site that competes with companies such as eBay owned Epinions.

A GUS statement claimed that PriceGrabbed had 17 million visitors in November 2005 and would generate $60 million in revenue this calendar year.

“This marks another entry by this company into the American marketplace, and consumers should know who they are dealing with,” said Consumer Help Web president Joan Bounacos. “The industry forming the heart of this company is notoriously consumer-unfriendly. Under subsidiary names, GUS companies have run afoul of US consumers before, and we are concerned about their functioning as a shopping comparison site for consumers who may not know their true identity. We are very concerned to see the companies own press release talking about ‘improving the quality of leads…by adding Experian data and analytics.’ That is a very slippery slope they are climbing.”

Bounacos said she was also concerned about a Federal Trade Commission complaint filed earlier this year against an Experian company using the name consumerinfo.com. The United States government reached a settlement with that company over “deceptive marketing” practices through the use of multiple web sites promising “free” credit reports.

Posted under Finance

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. The Federal Trade Commission (FTC), the nation’s consumer protection agency, has prepared a brochure, Your Access to Free Credit Reports, explaining your rights under the FCRA and how to order a free annual credit report.

A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

How do I order my free report?

You can order your free annual credit report online at annualcreditreport.com, by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

When you order, you need to provide your name, address, Social Security number, and date of birth. To verify your identity, you may need to provide some information that only you would know, like the amount of your monthly mortgage payment.

A Warning About “Imposter” Sites

The FTC advises consumers who order their free annual credit reports online to be sure to correctly spell annualcreditreport.com, or link to it from the FTC’s website to avoid being misdirected to other websites that offer supposedly free reports,but only with the purchase of other products. While consumers may be offered additional products or services while on the authorized website, they are not required to make a purchase to receive their free annual credit reports.

Posted under Finance

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