Catchy commercials, featuring a band of indie rockers forced to dress like pirates for their shifts in a seafood restaurant, remind Americans to request free credit reports every year. Except, as consumer watchdogs point out, the site they advertise actually requires visitors to subscribe to paid credit monitoring services. Those pirates could soon be headed for Davy Jones’ Locker, with new federal regulations requiring marketers to make the distinction between truly free credit reports and other services that require subscription fees.
Confusing Domain Names Hide Free Credit Reports Behind Marketing Offers
By the time a 2003 law required the major credit bureaus to provide free credit reports, all available “Free Credit Report” domain names had already been snatched up by marketers and advertisers. The joint venture company tasked with overseeing distribution of free consumer credit checks settled for AnnualCreditReport.com instead. Therefore, starting April 1, new rules require any Web site advertising “free credit reports” to prominently display this text notice:
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.
In addition, FTC rules also prohibit credit bureaus from upselling or advertising to consumers reaching their websites from the AnnualCreditReport.com link until after a mandated free report has been issued.
Free Credit Reports Still Viable Sources for Marketing Leads
Keep in mind, however, that a free credit report isn’t the same as a free credit score. Under the new FTC guidelines, credit bureaus can still sell credit scores and monitoring subscriptions, but only after consumers have received their full reports. FTC commissioners have left themselves room to implement even more stringent guidelines if consumers complain about fraud or misdirection on credit agencies’ sites after April 1.
As for the free credit report pirates, it isn’t clear whether the new rules may force them into the restaurant business for real. Canadian songwriter and comedian Eric Violette plays the lead pirate, and he’s been too busy working on his band’s new album to comment on the regulations. Marketers hyping free credit reports on radio or television have until September 1 to add disclosure notices to their ads, and it’s unclear whether watered down language will generate enough traffic to justify running the spots.