CPB Home Press Releases Consumer Links Search

The New York State Consumer Protection Board (CPB) is urging the Federal Trade Commission (FTC) to revise proposed amendments to the Free Annual Credit Report File Disclosures Rule, also known as the Free Credit Report Rule, to better protect consumers against the deceptive marketing of credit reports and provide for more prominent disclosure.

The CPB believes that the most significant risk of deceptiveness comes from the manner in which some commercial businesses advertise their “free credit report” offers to the public. Some consumers who responded to these advertisements complain they did not understand that accepting a “free credit report” also meant automatically signing up for credit monitoring or other similar service, and they were shocked when their acceptance of this “free” offer resulted in a monthly charge to their credit cards. The CPB highlights that in these cases, the advertisements and presentations fail to set clearly and conspicuously at the outset of the offer all the terms, conditions and obligations upon which receipt and retention of the free credit report is predicated to leave no probability that the offer might be misunderstood by the consumer. The CPB called on the FTC to supplement its proposed amendments with rules prohibiting the deceptive use of the word “Free” in these advertisements and presentations.

“Some commercial marketing of credit reports has mislead consumers who thought they were accessing their free credit report only to have signed up for costly services, which they did not intend to purchase,” said Governor David A. Paterson. “It is important that free credit report advertising rules be changed to aid consumers in making a more informed choice about purchasing extra services beyond receiving their free report.”

The FTC’s proposed amendments require in part, that online, print and television ads for free credit reports carry the following notice: “This is not the free credit report provided for by Federal law.” In its letter to the FTC, the CPB called on the federal agency to require that this notice be prominently placed within all advertisements. “In the case of print ads, the notice should be presented in a box and/or in a contrasting color to help ensure its prominence. The CPB also proposes that the notice requirement be applied in all non-traditional advertising contexts,” said Mindy A. Bockstein, Chairperson and Executive Director of the CPB.

Thus, where a consumer calls to place a fraud alert on their credit report and receives a solicitation to purchase company services that include “free credit report” offers, the consumer should be advised that this is not the free credit report provided for by federal law and that it may require a purchase.

The CPB supports the FTC’s proposal that when consumers visit a website where “free” credit reports are offered they 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.

“Access to credit reports is vital for consumers to be able to determine if they were the victim of identity theft and to conduct periodic financial checkups,” said CPB Chairperson and Executive Director Mindy A. Bockstein. “The CPB’s proposed changes reflect a response to the numerous complaints and inquiries the Agency has received and, we believe, will provide the type of disclosure that will help educate consumers on the distinction between the free annual credit reports to which they are entitled and the free credit reports that are accompanied by other “for fee” services or products.”

Under the Fair and Accurate Credit Transactions (FACT) Act, consumers are allowed one free credit report a year from each of the three major credit reporting agencies. Consumers can request their free report by visiting the actual free federal website www.AnnualCreditReport.com or by calling 1-877-322-8228.

As part of the CPB’s identity theft prevention and mitigation efforts and its promotion of financial literacy, the Agency encourages consumers through educational materials, which can be found at www.nysconsumer.gov, and presentations to take advantage of the federal law to obtain free credit reports. The CPB advises consumers to stagger their requests for their reports to the three major reporting agencies throughout the year to see a snapshot of their credit history and check them for accuracy.

The CPB, established in 1970 by the New York State Legislature, is the State's top consumer watchdog and think tank. The CPB's core mission is to protect New Yorkers by publicizing unscrupulous and questionable business practices and product recalls; conducting investigations and hearings; enforcing the Do Not Call law; researching issues; developing legislation; creating consumer education programs and materials; responding to individual marketplace complaints by securing voluntary agreements; and, representing the interests of consumers before the Public Service Commission and other State and federal agencies.