“Free” Credit Reports Have Strings Attached

Christine Poremski — Tue, 24 Mar 2009 16:40:28 +0000

These days you really have to be on your guard – from dubious foreclosure saviors to nasty bill collectors trying to trick you into paying money that you don’t legally owe.

But did you know that Experian, one of the three major Credit Reporting Agencies, has a scam of its own?

One Free Annual Credit Report

As many people know, the Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies – Experian, TransUnion, and Equifax – to provide a free copy of your credit report, at your request, once every 12 months. It’s important to check your credit report once a year for accounts you don’t recognize, which can alert you to identity theft, and discrepancies that can affect your credit score, which often result from errors or fraud by ethically-challenged bill collectors.

Here’s what you may not know: by federal law, the only regulated source for obtaining these annual free credit reports is AnnualCreditReport.com. There are three ways to request your report:

go to the AnnualCreditReport.com web site
call 1-877-322-8228 toll-free
fill out a request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281

Not All Free Reports Are Truly Free

When I Googled “free credit report,” the #1 listing was the Federal Trade Commission-approved AnnualCreditReport.com described above. The #2 listing was FreeCreditReport.com — which is an imposter site created by Experian.

If you order your “free” report through FreeCreditReport.com, Experian will automatically enroll you in a credit monitoring service that charges a monthly fee. Here’s the fine print on their site that you may not catch:

“When you order your free report here, you will begin your free trial membership in Triple Advantage(sm) Credit Monitoring. If you don’t cancel your membership within the 7-day trial period, you will be billed $12 for each month that you continue your membership.“

Does a 7-day trial period give you enough time to really try the service? And how easy is it to cancel once they’ve started to bill you? How did this happen?

On the Master Your Card blog, Mike summed it up well:

“In 2004, the U.S. Congress ordered the three major credit bureaus – Experian, Equifax, and TransUnion – to craft a website to allow consumers to order their credit reports online for free, once per year.

Not long after, Experian realized the legislation presented a clever, untapped marketing opportunity. They launched FreeCreditReport.com with the (obvious) hope that unsuspecting consumers wouldn’t know the difference between their not-so-free site and Congress’ mandated, free alternative.

Consumers have since been inundated on television, in print and, of course, online with ads for the FreeCreditReport.com website. That sing-song jingle (“Freeeeee Credit Report … dot.com!”) alone should be a crime, but that’s another topic for another day.”

What happens once you’re in their trap? There are many stories online of consumers who found that “unsubscribing” from Experian’s Triple Advantage program required months of phone calls, e-mails, and online forms.

Battle Of The Free Credit Report Bands

The FTC has received so many complaints about FreeCreditReport.com that they recently launched two of their own hipster videos with catchy tunes.

From the FTC press release:

“The new videos highlight the differences between AnnualCreditReport.com and those other sites that claim to provide ‘free’ credit reports. Other sites require users to pay hidden fees or agree to additional services. For example, some sites provide a free credit report if you enroll in a new service. If you don’t cancel the service during a short trial period, you’re likely to see membership fees on your credit card statement.”

You can watch the FTC spoof videos here:

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Beware Of Foreclosure Short Sale Scams

Regis Sauger — Sat, 14 Feb 2009 21:55:33 +0000

So you’re a couple of months behind on your mortgage payments, and you’ve been threatened with foreclosure. Perhaps your bank is pressuring you to cooperate with a “short sale.” They want you to sign a “deed in lieu of foreclosure,” where you sign a piece of paper to turn your house over to them, in return for a promise to keep the whole thing off your credit report.

Think again! Signing that paper will not make your problems go away — in fact, it may make things worse.

Don’t Lose Your Home – AND Your Good Credit

In today’s world, many folks are confused about what to do when facing a foreclosure. There are a lot of “opportunists” who claim to have an angle on how to get your money figured out. I have seen it all. The most common scam is telling you that a short sale of your home will save your credit.

Do you honestly think that the bank is NOT going to put your late payments on your credit report? No one tells you the truth — that your credit is already on the rocks and going down. Why? Because, they will tell you anything to get your money.

Photo by miusam-ck

Don’t Trust “Foreclosure Saviors”

Be on the alert when a well-dressed shark tells you he is going to make your payments for you and save your credit if you just sign a deed in lieu of foreclosure. This is total BS. A rip-off. A scam.

Wake up, man! Do you think strangers walk around handing out money to people they don’t know? This is the real world, and everyone has an angle to get your hard-earned money.

Get It In Writing

The only way this short-sale strategy will work is if the lender agrees in writing:

to delete your prior mortgage payment history from your credit report, and
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that they will NOT proceed with the foreclosure action.

If you get this agreement in writing, you can avoid a “default judgment” and keep the whole thing out of public records.

But be alert, and do not accept personal assurances or promises over the telephone. People lie every day.