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FTC Amends Free Credit Reports Rule
Starting April 1, advertising for “free credit reports” will require new disclosures to help consumers avoid confusing “free” offers – which often require consumers to spend money on credit monitoring or other products or services – with the no-strings-attached credit reports available at AnnualCreditReport.com and at 877.322.8228.
The Federal Trade Commission’s (FTC) Free Credit Reports Rule will require prominent disclosures in advertisements for “free credit reports.” For example, any website offering free credit reports must include a disclosure, across the top of each page that mentions free credit reports, which states:
THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV.
You have the right to a free credit report from AnnualCreditReport.com
or 877-322-8228, the ONLY authorized source under federal law.
The website disclosure must include a clickable button to “Take me to the authorized source” and clickable links to AnnualCreditReport.com and FTC.GOV.
The Credit CARD Act of 2009 required the FTC to issue a rule by February 22, 2010, to prevent deceptive marketing of “free credit reports.” Specifically, the act requires that certain advertisements for “free credit reports” include prominent disclosures designed to prevent consumers from confusing these “free” offers with the federally mandated free annual credit reports available through the “centralized source,” which is AnnualCreditReport.com, or 877.322.8228.
The FTC proposed amending the Rule in October 2009 and received more than 1,000 comments from consumers, consumer reporting agencies, consumer report resellers, business and trade organizations, state attorneys general, consumer advocates, law firms, members of Congress, and academics.
The amended rule also restricts practices that might confuse or mislead consumers as they try to get their federally mandated free annual credit reports. For example, the amended rule requires nationwide consumer reporting agencies – Equifax, Experian, and TransUnion – to delay any advertising for products or services on AnnualCreditReport.com until after consumers get their free credit reports.
The amended rule is effective April 1, 2010, except for the wording of the disclosures for television and radio advertisements, which takes effect on September 1, 2010. The FTC will monitor and evaluate the effectiveness of the amended rule and the required disclosures and will consider additional changes as necessary.
Information in credit reports may affect whether consumers can get a loan or a job, so it is important that consumers check their credit reports and correct any information that is inaccurate. Each of the nationwide credit reporting companies is required to provide consumers with a free copy of their credit report once every 12 months upon request.
Consumers can learn more about their right to a free credit report under federal law at www.ftc.gov/freereports.
ARMA International Washington Policy Brief, March 2010
