Consumerinfo.com who does business as Experian Consumer Direct and claims to offer a free credit report has been socked with a $300,000 fine from the Federal Trade Commission for failing to disclose to consumers signed up for their service that they would be enrolled in a credit-monitoring program and charged $79.95.
The FTC says that Consumerinfo’s failure to disclose the enrollment charges violated a previous settlement. In August 2005, the company coughed up $950,000 to settle FTC charges that it had deceptively marketed “free credit reports”. The FTC maintains that the company offered consumers a free copy of their credit report and said they would provide “30 Free days of Credit Check Monitoring.”
The problem the FTC has is that Consumerinfo’s advertising and Web sites failed to clearly explain that when the credit monitoring service expired, consumers would be automatically charged a $79.95 annual membership fee. The only way consumers could opt out is if they notified the company within 30 days to cancel the service.
Along with the $950,000 payment, the 2005 settlement required Consumerinfo to refund consumers who had been deceived and banned the company from making misleading claims about “free” offers. The FTC also forced the company to clearly disclose terms and conditions of any “free” offer.
The FTC says that Consumerinfo ran ads after the original settlement that violated the disclosure requirement. Besides paying $300,000 the company is also barred from misrepresenting any connection with the annual credit report available to consumers under the Fair Credit Reporting Act.
For Consumerinfo to make the same mistake twice leaves me to wonder if it ever really was a mistake. Its as about as credible as their claim to offer a “free” credit report.
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