Back in 2003, Congress passed the Fair and Accurate Credit Transactions Act to nip the online “free credit report” craze in the bud. This brought into existence the site www.AnnualCreditReport.com, where Americans can go to get one legitimately free credit report each year from each of the three credit agencies (Experian, TransUnion, Equifax).
To prevent confusion between this site and others like Experian’s conveniently-named FreeCreditReport.com, the law also forced anyone who was offering credit reports or scores online to place a huge blurb on their site explaining that it’s not actually free (see left). And they also have to have unwieldy disclosures elsewhere on the page pointing you to AnnualCreditReport.com for your actual free credit report.
Of course these regulations didn’t keep sites like FreeCreditReport.com from polluting your airwaves with annoyingly catchy jingles and Ben Stein cameos, so the FTC took legal action against them in 2005 and in 2007, claiming that their advertising was deceptive and unfair.
This is why the credit card regulations from last year also contained provisions to hinder these sites even further. As of April 1st, they can also no longer use the words “free credit report” or “free credit report and score” in any marketing copy. Instead they are limited to “free credit score”, and they have to state upfront that you are in fact paying for your credit report. So if you visit FreeCreditReport.com these days, you’ll notice that they actually charge $1 upfront now. But if you visit FreeCreditScore.com (which is a spin-off), it’s business as usual.
This seems to me like insufficient regulation with gaping loopholes to be exploited. The fact is that most consumers probably don’t completely understand the difference between their credit report and credit score. So forcing these companies to rename their websites, while continuing to push the same services, isn’t likely to affect their marketing or their traffic. Well, except for the fact that they’ll need new jingles.
For a breakdown on the services offered by all these sites, and how to get your credit score (not your report) we have a write-up here that we’ve updated with the new site information.