Consumers could be deceived by "free" credit report offers

There's only one government-authorized Web site where consumers can get their free annual credit report, and its not the one with the catchy jingles in television ads.

Attorney General Rob McKenna says more needs to be done to protect consumers attempting to obtain the free credit report allowed by law. Credit reports are crucial in helping consumers detect whether theyve become victims of identity theft or credit fraud, McKenna said. Credit reporting agencies are required to provide you a free copy of your report, but some see this as an opportunity to sell additional products. Under the law, 'free' means 'at no cost,' not 'free with a purchase'.

McKenna joined 42 other state attorneys general in sending a letter this week to the Federal Trade Commission, in conjunction with the FTCs proposal to help prevent deceptive marketing of free credit reports. The attorneys general said they support a number of the changes proposed by the FTC but would like even clearer disclosures.

We believe that advertising restrictions and mandatory disclosures are necessary to ensure that consumers are not misled or confused by advertisements and offers for free credit reports and are able to easily obtain their free annual credit reports, the letter states. By law, consumers are permitted one free credit report from each of the three major bureaus  Equifax, TransUnion and Experian. Consumers may request a report at www.annualcreditreport.com or by calling 1-877-322-8228.

The states letter identifies www.freecreditreport.com as an example of a Web site where consumers can be misled. Experian owns and heavily markets the site. Consumers file complaints stating they did not understand that by accessing their free credit report, they had signed up for a service that automatically charged a specific amount per month for credit monitoring, the attorneys general wrote.

The FTC proposes that TV and radio commercials for free credit reports must disclose, This is not the free credit report provided for by Federal law. The states want advertisers to include the statement, This report is only free if you make a purchase. Print and Internet ads would require similar disclosures and list the phone number and Web site for requesting the government-mandated free reports.

Consumers who visited a Web site where free credit reports are sold would be automatically sent to a separate landing page where they could choose to continue to the commercial site or instead visit www.annualcreditreport.com.

The attorneys general and the FTC also want to ban hyperlinks to commercial Web sites from www.annualcreditreport.com and prohibit marketing for paid services or products until after a consumer has received the free credit report.