Consumers have been complaining for years about the lack of disclosures by FreeCreditReport.com (and others) that charge customers for credit monitoring services at $14.95 per month. The Federal Trade Commission has had its sights on them from the beginning and has tried to pressure them to improve on their disclosures. Although consumers who sign up are given a brief trial period to cancel the service and still keep their free Experian credit report, many people simply forget or are not even aware they’ve been enrolled in a program until they notice the monthly service fee.
Senator Charles Schumer, (D-NY) is proposing a solution to the problem. He is asking the FTC to force Freecreditreport.com (and other companies like it) to give away the free credit report before the customer provides their credit card number. This will make it clear to the consumer that there will be a charge for credit monitoring afterwards. Schumer intends to introduce legislation that would require the reports to be given away before asking for credit card information, if the FTC cannot impose his idea through regulation.
“If these companies want to say - or sing for that matter - that they are giving people free credit reports, then they can’t charge people $15 a month, simple as that,” Mr. Schumer said in a release. “For years, these companies have said with a smile that they will provide a free credit report, even though the government already requires a credit report be provided for free every year. And then suddenly, months later, consumers get a bill for their credit-monitoring services. My plan would finally bust up this scam and give consumers some honest choices.”
Another recent proposal would require sites like Freecreditreport.com to create a separate webpage to remind visitors that the official source for consumers to receive free reports with no strings attached is AnnualCreditReport.com.
Future legislation or regulations may require notification at the end of any free trial period or require more steps to enable recurring charges. Companies should prove to consumers that they are worthy of handling recurring charges, just as consumers qualify for handling credit.
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