New federal rules clarify source for free credit reports

New rules to end consumer confusion over where to get government-mandated free credit reports go into effect tomorrow. Web sites and print ads that mention free credit reports must clearly disclose that the government-authorized source for obtaining a free report is AnnualCreditReport.com. Television and radio advertisers have until Sept. 1 to comply with the rules, which were adopted by the Federal Trade Commission in February under the Credit CARD Act of 2009.

"We're hoping to cut through the fog that enshrouds the ability of consumers to get their free credit reports without being diverted by the credit reporting agencies," said David C. Vladeck, director of the FTC's Bureau of Consumer Protection, during an April 1 visit to the Yonkers, N.Y., headquarters of Consumers Union, the nonprofit publisher of Consumer Reports magazine and this blog.

The rules are in response to widespread advertising for free credit reports from the credit reporting agencies and other companies trying to sign people up for paid credit monitoring and similar services. Many of the advertisers have Web site sites that use "free credit report" or similar terms in their Web addresses. One example is Freecreditreport.com, from the reporting agency Experian. As a result, consumers often are confused about where to go to order the free credit reports federal law entitles them to receive from each of the three major credit-reporting agencies once every 12 months.

Under the new disclosure rules, for example, any Web site offering free reports must post the following notice across the top of every page that mentions a free report:

"THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV. You have the right to a free credit report from AnnualCreditReport.com or 877-322-8228, the ONLY authorized source under federal law."

The rules also require credit-reporting agencies, in responding to a request for a free report, to provide the report before subjecting the consumer to any advertising for products or services. Previously, consumers seeking their reports first encountered what Vladeck described as a "gauntlet of ads," some for free trials that turned into paid services for consumers who didn't remember to cancel.—Anthony Giorgianni