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The Color of Money: Underlining the 'Free' in 'Free Credit Report'

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By Michelle Singletary
Sunday, October 11, 2009

I've been meaning to pull my credit reports for some time.

I, like so many others, am concerned about identity theft or uncorrected errors in my credit files that might ding my credit scores.

When I finally got around to it, I knew to go to AnnualCreditReport.com or call 877-322-8228. I haven't been fooled by those ubiquitous commercials for FreeCreditReport.com with the goofy guy playing a guitar and complaining about how his life is messed up because he didn't check his credit report.

But the Federal Trade Commission has received many complaints from consumers who were misdirected from the official centralized site. Every person is entitled to a free credit report every 12 months from each of the three nationwide consumer reporting agencies -- Equifax, Experian and TransUnion.

In an effort to help keep people from ending up on impostor sites or falling for promotions for free credit reports that aren't really free, the FTC is seeking public comment on proposed amendments to the free-report rule. The credit card legislation passed this spring requires the agency to create amendments to the law by Feb. 22, 2010, to prevent deceptive marketing of these reports.

Over the next two months, you'll have a chance to weigh in on the FTC's rulemaking effort. Do take the time to comment, especially if you feel you've been deceived. This isn't a trivial matter. These rules will dictate how you get your credit reports. Most of what the FTC is proposing will make things better, but the agency needs to be tougher.

"We are encouraging consumers and anybody else to comment," said Katherine Armstrong, an FTC lawyer. "We want to know if we got it right."

On one important rule, the FTC has it only partly right.

The agency wants to prevent the credit bureaus from offering any product or service until after consumers get their free reports. The law currently permits the credit reporting agencies to advertise their proprietary products and services through the centralized source, in this case AnnualCreditReport.com.

Once you've followed directions and entered personal information intended to make sure you are who you say you are, you will encounter advertising for credit scores and credit monitoring services. Then you have to decline the offers before obtaining your truly free credit report. I had to click through two Web pages of such marketing before getting to my report for one bureau.

Although the FTC said it recognized the potential for confusion from such marketing, it initially chose not to restrict it. Now the agency is trying to rectify that mistake.

The FTC is proposing that any advertising or marketing for products or services through the centralized source be delayed until after consumers have obtained their reports through telephone, mail or Internet requests.

The agency is also proposing that the credit bureaus remove the hyperlinks to their specific Web sites from AnnualCreditReport.com.

On the official site, there is bold red lettering that says "Start Here to view and print your credit report now." But some people assume they should click on the credit bureau links below that wording. If they do, they are navigated away from the free site. Consumers who mistakenly click on the links then see a page with products and services offered by the bureaus.

Another proposed rule would require that companies prominently inform consumers they haven't landed on the official free-report site. For example, the FTC says that if a Web site advertises a free credit report, the other site must send the consumer to a separate landing page with the required disclosure: "This is not the free credit report provided for by federal law."

One amendment would require audio disclosures about the official free reports to be delivered in a slow and deliberate manner.

To read the text of the Federal Register notice with all the proposed changes, go to http://www.ftc.gov. Comments must be received by Nov. 30.

To submit your comments electronically, go to http://public.commentworks.com/ftc/FreeCreditReportNPRM. Comments on paper should be mailed or delivered to Federal Trade Commission, Office of the Secretary, Room H-135 (Annex T), 600 Pennsylvania Ave. NW, Washington, D.C. 20580.

The FTC should remove all advertising and marketing by the credit bureaus before, during and even after the process of getting a free credit report. It's a pain to have to worry about identity theft or mistakes when checking your credit report. People should be able to get their reports and exit the Web site without having to go through a gantlet of sales pitches. Why give the bureaus a commercial crack at all?

If the FTC really wants to end consumer confusion, AnnualCreditReport.com should be commercial-free. Right?

If you're with me, let the FTC know.

-- By mail: Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

-- By e-mail: singletarym@washpost.com.

Comments and questions are welcome, but because of the volume of mail, personal responses are not always possible. Please note that comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.


© 2009 The Washington Post Company

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