Free Credit Report Offers Examined

There was a point in time it seemed like you could not turn on your television without seeing and hearing the free credit report jingle. Those merry men dressed as pirates lyrically painting a picture of why we should all check our credit reports. Besides, it was free, right? It depends on your personal definition of “free,” which for the advertisers meant free as long as you don’t mind placing your foot in a proverbial snare so they can shake money out of you later. The Federal Trade Commission noticed the advertising, evening going as far as mocking them with its own jingle at http://www.ftc.gov/multimedia/video/credit/reports/apartment.shtm.

Then the FTC brought down the hammer, full disclosure of where consumers could obtain their federally mandated credit report. Too many consumers did not understand that they could go to www.annualcreditreport.com for a free credit report with no-strings attached (no credit score though, the law does not require it currently). The level of advertising for commercially generated free reports was enormous; the most well known free credit report site reportedly spent $100 million annually on advertising. How much free stuff can you give away with an advertising budget of $100 million? As it turns out, only so much, people ended up with credit card charges they did not want because to get the free credit report they had to sign-up for a 90 day or so free trial of identity theft protection or credit monitoring. If they did not cancel by the 90th day they would be charged, the complaints flowed like an angry volcano.

Per the FTC enacted disclosure any website offering free credit reports must now place at the top of the page:

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 Web site disclosure must include a clickable button stating “Take me to the authorized source” and clickable links to AnnualCreditReport.com and FTC.GOV.

Disclosures are required for radio and television advertising as well, which went into effect on September 1, 2010. This is why we do not see or hear as many of the advertisements. However, there are a thousand ways to skirt regulation, so the new thing is to offer a free credit score instead of a free report. Fortunately consumers are catching on to the unsavory nature of these schemes. Even the free credit score is a ruse in the sense that it generally is not even the score lenders use for underwriting, just a fictitious self-created formula to get money out of unsuspecting consumers.

If your New Year’s resolution was to improve yourself financially this year, go to www.annualcreditreport.com right now and print off a copy of your credit report for your records.

Have a mortgage or credit question you would like for me to cover on this blog? Shoot me an email so I can address it. If you want to apply for a mortgage in Arizona give me a call at 480-203-4641, the application process is easy, and it only takes 10 minutes for me to get the information to get you started on your way to home ownership.

Patrick Ritchie
Mortgage Finance Instructor

Ritchie School of Real Estate Finance

480-203-4641 Cell
Patrick@PatrickRitchie.com

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