Checking Your Credit Report

In December 2003, when Congress passed along the Fair and Accurate Credit Transactions Act (FACTA) for a presidential seal of approval, the idea was that consumers would be able to access their credit reports—at the time available for a fee from the credit reporting agencies— free of charge, once a year from each of the three major CRAs (Experian, Equifax and TransUnion).

In the private sector, companies began charging for credit reports that consumers could otherwise obtain at no cost. Six years after FACTA’s passage, the FTC is looking into ways to stymie such efforts. As The Washington Post’s Michelle Singletary reports this week, the agency is seeking public input on its “effort to help keep consumers from ending up on imposter sites or falling for promotions for free credit reports.” According to an FTC statement released last month, the FTC is responsible for issuing a rule on the marketing of such reports by February 2010.
For victims of identity theft, particularly those who’ve been the subjects of new account fraud (that is, unauthorized individuals opening up new credit accounts in a person’s name), or anyone who wants to closely monitor their credit reports for signs of fraud, it can be valuable to monitor credit more frequently than the three times a year (each time with a different CRA) the government permits at no cost. In cases where identity thieves are ringing up fraudulent accounts, the earlier the criminal activity is detected, the better.

But with the fee-based “free” credit report services, consumers say that it isn’t often clear enough that they’re being signed up for a yearly subscription to monitoring services when they obtain their credit report.

U.S. Senator Charles Schumer called this week for the FTC to impose two new rules for credit report issuers: that companies actually issue the credit report for free before they ask for consumers’ credit card information, letting consumers choose whether they subscribe to the monitoring services rather than automatically enrolling them. He also asked for disclosures in television advertisements for these services, reminding consumers that they are entitled free credit reports annually by the government, and that the companies' "strings-attached" offers are not affiliated with www.annualcreditreport.com.

For the time being, the only government-sanctioned Web site for obtaining free credit reports is www.annualcreditreport.com.

The Post’s Singletary points out that the FTC’s site contains advertising for credit scores and credit monitoring services that cost money, which can lead to confusion. Currently, the FTC has suggested delaying such advertising until after consumers have obtained their reports and removing links to credit reporting agency Web sites from annualcreditreport.com, Singletary writes.

Those interested in the FTC comments on the matter can download more information from the agency.