Many free credit reports still aren't free

On June 1, consumers living in the south will have the right under a federal law to get a free copy of their credit report.  But if they aren’t careful, they might end up paying the credit bureaus for the reports instead. 

An independent research firm has found that there are dozens of Web sites with names like My-Free-Credit-Report.com which claim to offer free reports, but instead steer consumers to sign up for subscription-based services sold by credit bureaus.  Often, these paid sites are  easier to find than the Congressionally-mandated site, AnnualCreditReport.com.

For example, visitors to Google’s search engine who type in “free credit report” get a list of links for Web sites that ultimately sell services from Experian and Trans Union. AnnualCreditReport.com, the only place to get a free credit report, doesn’t make the first page of search results.

Javelin Strategy & Research, which conducted the study, said it found 16 so-called "free credit report" sites connected to Experian and nine to Trans Union.  Javelin found no such sites connected to the third bureau, Equifax.

FREE VIDEO When free isn't free MSNBC.com's Bob Sullivan discusses sites Web sites that offer free credit reports, then charge a fee. MSNBC

At ConsumerInfo.com, an Experian site, visitors get the message “Free! Free! Free!  Get your FREE Credit Report Online in Seconds!!!” But clicking on “Free report” sends users to a sign-up page. At the bottom of that page, in small print, is the message that a credit card is required and a fee will be charged.

“The low monthly fee of $9.95 will automatically be charged to your credit card after the trial period ends. What a small price indeed for financial peace of mind!” It says.

"This whole thing is really ugly," said Pam Dixon, a consumer advocate at World Privacy Forum, who published a report with similar findings in February. "We're getting a lot of complaints from consumers and they are furious." 

'Obstructionist'
Consumers who sign up are enrolled in credit monitoring services sold by the credit bureaus. For a monthly fee, usually around $10, the bureaus let consumers see their credit reports an unlimited number of times to check for signs of ID theft.  They also send alerts to consumers when there is activity in their credit reports. The free service only allows a consumer to check his or her credit rating once a year.

James Van Dyke, author of the Javelin study, characterized the pay sites as "obstructionist."

"It dismays me when you type free credit report keywords and consumers are obstructed by a list full of hits of sites that aren't really free credit reports," he said. He did offer praise for Equifax, which apparently doesn't engage in the sales tactic. "They've kept their nose clean," he said. He also said several online banks link consumers directly to the correct free credit report site.

Colleen Tunney, spokeswoman for Trans Union, denied the company was intentionally misleading consumers. "I would take issue with anybody who says we are trying to confuse consumers...Trans Union has been consistent and that there is one place to go to get your (federally mandated free) credit reports," she said.  "We have no intention of confusing consumers about that. But we are in the business of selling credit-related products to consumers, and that's what you see at (1-free-credit-report.com)."

She said the Trans Union's Web sites indicate clearly that consumers must pay for services ordered there.

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