Free Credit Reports: My Exciting Adventure

Under the federal Fair and Accurate Credit Transactions Act of 2003, the credit reporting agencies must provide a yearly free credit report to individuals who request it. This was one of the benefits given to consumers by the law in return for extending the federal preemption of certain state law regulations.

There are three major credit reporting agencies: Equifax, Experian, and Trans Union. You may have heard that there’s a new website where you can conveniently get your credit report from all three agencies. Since I pay attention to this field of law, I knew the name of the website, but many people I’ve spoken to don’t know what it is called.

But we live in the age of Google, so most people would just do a Google search for “free credit report.” Here’s what you pull up in your search:

annualcreditscore3a.jpg


The first link, www.annualcreditreport.com, is the bona fide website. But many people might be confused by the second website in the list, called www.freecreditreport.com. [For a while, the Free Credit Report website pulled up first in the Google search results, but now it is ranked second.] Suppose that a person mistakenly went to this website:

annualcreditscore4a.jpg

Looks like a great site. You can get your free credit report. But wait . . . if you read carefully:

annualcreditscore4b.jpg

Thus, this isn’t the free credit report that is promised by law. Instead, it is a way to get people to sign up for credit monitoring service which costs $12.95 per month, or over $150 per year. This website is run by Experian, one of the credit reporting agencies that is by law required to provide you with a free credit report at www.annualcreditreport.com.

To be fair, the website does provide a link to the Annual Credit Report site, but then it says: “Remember, all free credit reports are not created equal. Get your Free Credit Report and Credit Score from the leading provider of consumer credit monitoring products.” So I guess that the message is you can get the crappy free credit report from the official Annual Credit Report website, or get the better free credit report from Experian which isn’t free.

But I wasn’t fooled. I went to the Annual Credit Report site and began the process. Here’s what the official Annual Credit Report site looks like:

annualcredit1a.jpg

It generally worked well. It directs you to each of the credit reporting agencies’ websites, where you either have to establish an account or answer certain questions to verify your identity.

Some of these questions were tough. One credit reporting agency asked me three multiple choice questions: (1) the name of my mortgage company (easy); (2) my monthly payment amount (not so easy, since it’s automatically deducted from my bank account — I had to dig up the statement to find the precise amount); and (3) the name of a street I once resided on (very hard). The last question was hard because the correct answer was a street I lived on while I was clerking for a judge in Los Angeles about 6 years ago. I lived there for just a year, and didn’t really remember the street name very well. But I guessed it correctly! Yippee!

The other thing of note is that many of the credit reporting agencies kept trying to sell me my credit score. Trans Union was particularly aggressive. It put up an entire screen urging me to pay $5.95 for it. I said “no thanks.”

annualcreditscore1b.jpg

But then, in a nice tricky way, toward the end of my session, after I got my credit report, it prompted me like this:

annualcreditscore2a.jpg

I almost fell for it. After all, it was on my “remember” to do list, as if I had forgotten to take this important step. And apparently, Trans Union and I are on a first name basis. With all they know about me, I guess it would be odd if we weren’t on a first name basis.

In the end, I got all my credit reports, and escaped without paying a dime. That wasn’t easy, though. . .

Some thoughts overall:

1. The official website should be www.freecreditreports.com, not www.annualcreditreports.com, which nobody can remember. By maintaining the www.freecreditreports.com website, Experian is causing confusion and is exploiting its legal requirement to provide free credit reports to hawk its expensive credit monitoring service instead.

2. It seems unseemly that credit reporting agencies are exploiting their legal requirement to provide free credit reports to consumers to sell various services and products. This shouldn’t be about making a quick buck from consumers. It’s part of their legal responsibility to provide consumers with better protection against identity theft — it shouldn’t be a marketing opportunity.

3. The thought that I can’t obtain another free credit report for a year strikes me as very problematic. That’s a long period of time not to be monitoring one’s credit report. Of course, I could pay to see my credit report more often . . . and my guess is that the credit reporting agencies would be more than happy to take my money.

For some more reflections on using the Annual Credit Report site, see Eric Goldman’s (law, Marquette) post from earlier this year. I also posted about the issue at PrawfsBlawg.

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11 Responses

  1. sas says:

    Thank you for the info. I was not aware that we were entitled to free annual reports. Although, as you noted, it is tempting to press the score buttons.

  2. Dan, great post! Two quick notes:

    First, here in California, a class action suit has been brought against Experian for advertising its service as providing a better consumer report than that available free under the FCRA. The FCRA requires a “full file” disclosure, so in theory, all credit reports should be equal.

    And second, those disclosures on the Experian fake free credit report site were mandated by the FTC in a consent decree with Experian. EPIC wrote a complaint to the FTC back in 2003 arguing that the company was falsely advertising free credit reports but really giving people expensive, free-to-pay conversion credit monitoring. http://epic.org/privacy/experian/

    The FTC agreed with us, ordered the company to disgorge $1m in profit, and agree to make better disclosures: http://www.ftc.gov/opa/2005/08/consumerinfo.htm

    C

  3. Free Credit Report Follies

    Privacy expert Dan Solove has an excellent post over at Concurringopinions.com describing the trials consumers face when they try to find their federally-mandated free credit reports on the Internet. Even after you beat your way to annualcreditreport.c…

  4. LMK says:

    Thank you for the information, just a quick note Experian — while I agree they are out of line — the site and service you talked about isn’t merely an exploitation of the new law. It has been around several years longer and the service actually comes free with Microsoft Money. If you sign up on the website you visited and then cancel before charged you still get your report — although they should definatley make it more obvious that this is what you need to do for the report to be free, especially in light of the new law which changes expectations.

  5. Paul Gowder says:

    As I recall, one of the sites (I think it was equifax, but I’m not sure) actually claims that they’re required by federal law to try and sell the credit score when you go there to get your free one. Has anyone noticed this? That is at best a stretch (assuming that the FCRA requires it be available for purchase, which I’m not sure about) and at worst a ridiculous lie.

  6. sas says:

    Paul,

    You are right. I forget which of the three says that, but there is definitely language which says that they are required to charge for the score.

  7. BTD Venkat says:

    Chris Hoofnagle: is the text highlighted by this post the “better disclosure” mandated by the FTC?

  8. Doug Lichtman says:

    Dan –

    I think you can get a free report even within the next year if you are denied credit for some reason, or if you have reason to believe that you are the victim of identity fraud. We just had an issue like that (it turned out to be nothing more than a typo entered by a retailer) and I was within minutes able to get my full credit report and track the problem down, all online while still enjoying my morning cup of coffee.

    Keep up the great content, by the way. The mix of humor, substance, and basic information here is really well balanced. I really enjoy it.

  9. Bob Gellman says:

    I don’t know if everyone has seen the report on the “free” credit report websites done by Pam Dixon at the World Privacy Forum. See CALL DON’T CLICK at http://worldprivacyforum.org/wpf_cdcstudy2_summary.html

    It shows that dozens and dozens of websites were established to try to trick people into paying for credit reports that are supposedly free. Dan’s post illustrates one of the sites. The extent to which websites are trying to extract money and information from people seeking free credit reports is both staggering and normal for the Net these days.

    You can request a free credit report by mail. The form only asks for basic information. Providing free credit reports online costs the credit bureaus very little. Providing reports by mail is much more expensive for the credit bureaus. Those who have an interest in harassing credit bureaus for their sins might choose to use snail mail.

    I made a snail mail request for a report from Equifax alone, enclosing a form for me and for my wife in the same envelope. My wife’s report came normally. Mine came once. Then a notice saying that I had already received my free credit report for the year. Then a second copy of my credit report.

    Finally, you can get a mild equivalent of credit watch by staggering your requests. Every four months, ask for a credit report from one of the three main credit bureaus.

    As for the FTC’s settlement with Experian for its “free” credit report website, you are invited to look for my column on the subject that will appear in DM News (dmnews.com) in a few weeks. The highlight: Experian raked in hundreds of millions of dollars through its “unfair and deceptive” website. The FTC fined the company less than one million bucks.

  10. Doug — Thanks. Your praise of the blog is very kind and much appreciated.

    Bob — Thanks for the very useful tips. Please post a link to your column here when it’s online.

  11. Tammy says:

    Dear, Dear, Daniel,

    I want to Thank you for your write up on the confusing options and lagal matters of a free credit report. I have been trying for four solid years to get my credit report (even by phone to the three major companies you mentioned), to no avail). I have been told by others who have had permission to check my credit that I have things on my reports dating from 1987;EVEN THOUGH THEY WERE PAID OFF! I am about to embark on your suggested journey and just had to give you a sincere and hearty THANK YOU. I pray that with this new information I will finally be able to do something for myself about the ratings and reports I continue to get. May GOD Bless you and your family in return for the generous and kind deed you have given for “free”.

    In His Love,

    Tammy