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FTC Seeks Comment on Proposals to Amend “Free Credit Report” Rule

Written by: Andrew Bernstein

As I present Financial Literacy Awareness Seminars in South Florida, one of the topics I cover is “How to Obtain Your Free Credit Report.” Almost everyone present at each seminar shouts out a few different answers based on what they have seen on television. This generally brings me to a boil. Almost all of these folks never see or hear “THE FINE PRINT” in those advertisements.

I make very sure that each participant is supplied with the correct information on obtaining a free credit report.

NOW the Federal Trade Commission has taken action, for that, I applaud them. The information appears below and it’s important for everyone to know.

FTC Seeks Comment on Proposals to Amend “Free Credit Report” Rule

The Federal Trade Commission is seeking public comment on proposed amendments to the Free Annual File Disclosures Rule, also known as the “Free Credit Report Rule.” The proposed amendments would implement a new law designed to prevent consumer confusion in advertisements for “free credit reports” The amendments also would address certain practices that may interfere with a consumer’s ability to obtain the credit report that credit reporting agencies must provide for free under federal law.

The Credit Card Act of 2009 requires the Commission to issue a rule by February 22, 2010 to prevent deceptive marketing of “free credit reports.” Specifically the Act requires that certain advertisements for “free credit reports” include prominent disclosures designed to prevent consumers from confusing these “free” offers with the federally mandated free annual credit reports available through the “centralized source,” which is AnnualCreditReport.com or 877-322-8228.

To implement this directive, the Commission is proposing disclosures for television, radio, print, internet, and other media in which “free credit report” advertising may occur, along with requirements to ensure that the disclosures are sufficiently prominent. For example, for any internet site offering free credit reports, the Commission proposed a requirement that, before the consumer may obtain a credit report from that website, such site must display a separate landing page with the required disclosure: “This is not the free credit report provided by Federal law. To get your free report, visit www.AnnualCreditReport.com orcall 877-322-8228.

In addition the Commission is proposing to amend the Free Annual File Disclosures Rule to restrict practices that may confuse or mislead consumers as they attempt to obtain their free credit reports through the centralized source. For example, consumers are subjected to substantial amounts of advertising from the nationwide consumer reporting agencies as the attempt to obtain their free annual credit reports. The Commission has received consumer complaints about promotions for products and services that confuse and frustrate consumers as they attempt to obtain their free credit reports. The Commission proposes to amend the Rule by delaying such advertising until after the consumer obtain their free annual credit reports, and by requiring other measures.

For more information you can contact www.FTC.gov

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