printer iconPrinter-friendly Version



Credit Reporting Companies Bombard NY'ers With Ads Offering to Give a You Free Credit Report But Actually Make You Sign up for a Costly Monthly Subscription

Schumer Plan Would Require Companies that Offer Free Credit Reports to Show Reports BEFORE They Take Credit Card Information So Consumers Don't Buy a Subscription to Their Service

Companies Make Millions Even Though Gov't Provides Credit Reports Free to Everyone -- Companies Would Be Required to Disclose in TV Ads that Gov't Already Requires a Credit Report be Provided for Free, Same As They Have to Online and in Print

Today, U.S. Senator Charles E. Schumer announced he is urging the Federal Trade Commission to bust up the long-running scam of credit reporting companies duping millions of New Yorkers into buying credit monitoring services by offering a so-called “free credit report” and then tacking on a costly monthly subscriptions charge that can cost hundreds of dollars a year. Schumer today said that his plan would require any company that purports to offer a free credit report to disclose that consumers do not have to pay for their services in order to get a free credit report and disclose in their advertising that consumers are entitled to a free credit report from the government once a year. In addition, Schumer’s plan would require these companies, when someone requests their free report, to show that report on the computer screen before the customer provides their credit card information, that way the consumer has the choice of subscribing for year round credit monitoring.  Nine million people spend a total of $650 million to $700 million annually on the services, according to Carter Malloy, a Stephens Inc. analyst.


“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,” Schumer said. “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 in the mail for their credit monitoring services. My plan would finally bust up this scam and give consumers some honest choices.”


Schumer today said that anyone who has watched TV over the last few years has probably seen the ubiquitous commercials from companies that offer consumers “free” access to their credit reports when they enroll in a paid subscription credit-monitoring service.  The commercials can be very catchy, and they may serve as a reminder to consumers to be vigilant about monitoring their credit.  However, these commercials, among many others that promote similar services, take advantage of Americans’ very real worries about identity theft in a misleading and deceptive way, by tricking them into paying for reports they are entitled to get for free.


In 2003, Congress passed the Fair and Accurate Credit Transactions Act, which required that all Americans be allowed to access one free credit report annually from each of the three credit reporting bureaus, including the company that produces the commercials.  In 2009, Congress added a requirement that the FTC issue new rules to prevent deceptive advertising.  The FTC is currently considering proposals pursuant to that requirement.


Schumer today called on the Federal Trade Commission to implement two important changes as part of its rulemaking.  First, he asked the FTC to impose new regulations requiring that television advertisements include the exact same disclosure that is already present on websites and print mailings to inform consumers that they are entitled to a free credit report annually from the government, and that any offer that comes with strings attached is entirely unrelated to the website  Consumers who still wish to enroll in credit monitoring services may of course do so, but they won’t be fooled into thinking that they need to pay a subscription service for access to their credit reports.


Schumer also asked the FTC to require those companies who continue to advertise free credit reports to provide consumers with their credit reports before they turn over their credit card information to sign up for the service. This way, consumers can actually get the free credit report that is advertised without being locked in to paying a monthly fee.


Schumer today said that if the FTC can’t impose these rules through regulation, he will propose additional legislation.


Schumer praised the efforts that the FTC has made and continues to make to ensure that consumers are not misled by advertisements promising access to a free credit report in exchange for enrollment in a paid subscription service.  The FTC not only has promoted the actual free credit report site but it has also pursued businesses that have misled consumers, including reaching a settlement that totaled over $1 million against the company for failing to disclose the fee that consumers would pay for enrolling in their credit monitoring service.  In addition, the FTC has required that all companies who purport to offer a free credit report disclose that they are not affiliated with, which allows consumers to access one free credit report annually from each of the three federal credit reporting bureaus and requires no subscription to any paid services whatsoever.


Resource Center
chuck around new york icon
Chuck in New York
See what Chuck has been doing in
your area lately
Casework Icon
Services for New Yorkers
For help cutting through the federal government's red tape
Tours Icon
Schedule a Tour
Plan your trip to Washington D.C.
Veterans Icon
Veterans Assistance
Help for those who have served our nation
Protecting Consumers icon
Protecting Consumers
Help and Resources for New York consumers
Grants Assistance icon
Grants Assistance
Guide to applying for federal grants
Financial aid assistance icon
Financial Aid Assistance
Guide to applying for federal financial aid
e-newsletter icon
facebook icon
twitter icon
youtube icon
flickr icon
CMF Bronze Mouse Award for the 111th Congress