Don't Pay for Something You Can Get for Free

Anyone seen those cute commercials for FreeCreditReport.com? (If not, here's an example of one.) What would you expect from such a site? Maybe a FREE credit report? That sounds reasonable, since that's their name, but the NY Times says that in this case the name is very misleading:

Consumer groups have long objected to sites like FreeCreditReport.com. Consumers may obtain a free credit report each year from the three major agencies, as mandated by an act that Congress passed in 2003. The only authorized site for that is AnnualCreditReport.com.

The three major credit bureaus, Experian, Equifax and TransUnion, are required to offer reports through the authorized AnnualCreditReport.com, but the bureaus also make money from their own credit reports.

Experian, which owns FreeCreditReport.com, increased both its site visitors and new member sign-ups by 20 percent in 2007. The company attributes those increases to its catchy ads.

In other words, you can get a FREE credit report from each of the reporting agencies every year at AnnualCreditReport.com. That's FREE -- you don't pay anything for your reports.

On the other hand, if you prefer to pay for something you could otherwise get for free, you can go to a site like FreeCreditReport.com, sign up for a bunch of services you probably don't need, and pay for months to come (automatically charged to your credit card, of course.)

Which of these options sounds like a better deal to you?

Comments

["Mo" Money]

Freecreditreport.com is doing lots of TV advertising. I'm guessing that they will get lots of customers to sign up for their services. It pays to investigate everything!

[rdub98]

Although I love the ads, I knew that the site was not the site for getting the true Free Credit Report. I work for a financial institution and it really is a little disconcerting that they market it this way. The people who really need the free reports usually don't need the added debt.

[Jon]

The ads are cute, but I get a bit peeved when I see them. I've used AnnualCreditReport.com for several years now to monitor my credit, and it just fries me that people are being deceived into paying for something they can do for free.
One of the ads, however, is even more misleading. It implies that the young man in question could have seen his fiancee's credit report - which he couldn't do unless she gave him all of her information. If she disclosed that much, he could have found out about her bad debts verbally in the first place.

[pink panther]

Heh... and build a sucker list too... betcha they make more money selling the list of people who pay for a freebie to others! Need to look at fine print on freecreditreport.com and see if it parses out to say they'll sell your contact info to third parties!

[pink panther]

Followup - their privacy policy says: "We may share information about you with affiliated and non-affiliated third parties when you register for one of our transactional or membership products" followed by mind-numbing legalese. As far as building a sucker list as a profit center, I am not sure what wouldn't be included in "affiliated and non-affiliated third parties" and how this qualifies as a "privacy policy" since it basically says they'll sell your info to anyone who wants it. They state: "We may share your non-public personal information with non-affiliated third parties as permitted by law." As far as I know, there is no law against selling targeted-marketing contact info to anyone.

[Kevin]

The commercials always say "requires enrollment in TripleAdvantage" or something like that, so that should tip people off there is a catch. But you're right, the name "freecreditreport.com" is misleading.

[MoneyLint]

I share your resentment of freecreditreport.com. Very misleading and if you pay attention to their commercials now they offer a quick verbal disclaimer about subscription into a credit monitoring service. I blogged about this a few weeks back.
One suggestion I may offer to your readers is that it might be in their best interest to stagger their credit report requests over the year, say one every 4 months, so they always have the most current credit information and don't blow all three requests in one sitting. I made this request the first time I used the service.

[Matt H]

Kevin, you're right, but there's another great tipoff that there's a catch: the very fact that they're running this huge national ad campaign. All those ad buys couldn't possibly be cheap; it has to be paid for somehow.

If you were a credit reporting agency, would you want to give away a service that people are willing to pay for? Of course not, but the government requires you to anyway. So the logical thing to do is set up a web site where people pay for credit monitoring services, give it the most guessable name, and then advertise the hell out of it. Meanwhile, set up the site the government requires you to, but give it a less obvious name.

[Matt H]

pink panther: the reason it qualifies as a privacy policy is that it states their policy on privacy. That's what the whole push for sites having privacy policies was about: disclosure. It doesn't imply that you're going to LIKE their policy.

[becky]

Those ads, while hilarious, are very upsetting because those they are advertising to typically don't know that you really can get a free credit report from a different site. I personally believe that it's false advertising.

By the way, I teach a financial literacy class to disadvantaged people and we recommend the website annualcreditreport.com to them to get their free credit reports. Interestingly enough, some of the class participants said that even this website is offering things such as credit scores and credit moniotoring (of course for fees) and that it is somewhat difficult to find out how to get just the free reports (the 'No Thanks' like is often smaller than all of the other links offering the fee-related services). It's so disappointing that this website cannot just be easy to use...

[Cheap Like Me]

Shows what a catchy jingle will get you! My daughter has them memorized. Their only advantage, I have to say, is that it has led us into several conversations with our 7-year-old about responsible use of credit -- what is a credit card, why and how we might use our Amex cash card to buy groceries, etc.

[Steve]

Heh, I got suckered by them, just from searching the Internet when I needed a credit report. After pages of fine print, I ended up getting my Experian credit report for "free" but was signed up for a number of useless $1/month deals, one of which took several months and numberous phone calls before I was able to cancel it. They are a truly evil company, trying to trick and manipulate consumers.

[pink panther]

"it is somewhat difficult to find out how to get just the free reports" I noticed this too the last time I went to the correct annualcreditreport site. This site links you to the three credit agencies, and each one does everything they can to get you to veer off the free path and load up on their expensive candy. It was hard to find the free report.

[Matt]

I have never been a fan of the free credit report websites, its always a scam to get you into some sort of bogus creditmonitoring subscription. However a gem that I have found is CreditKarama.com, they let you pull your score on a daily basis for FREE! The only catch is its a random score from the 3 major reportin firms. But it does at least give you a ball park of where you sit at.

[Alex Benke]

I recently got my report and started with freecreditreport.com because of the commercials. I have used annualcreditreport.com in the past, but the commercials were such a strong message that I switched the two in my brain! Luckily I waded through the crap and eventually got back to get my free report with no strings attached.

In any case, I have a strategy that others might benefit from, although it's not rocket science: I get one report from each agency per year, but spread each out by 4 months. That way I get to check my report 3x per year for free.

[briang467]

Google adsense placed an ad for freecreditreportsinstantly dot com on the page in my RSS reader with this post.

Hilarious and slightly demented juxtaposition.