What is The Free Credit Report Rip Off?
Most individuals have seen their cute ads on television: the endearing slacker lad beset by challenging life circumstances, forced to operate inside a pirate-themed restaurant or at a Renaissance Faire, and all while he didn't avail himself of this company's provide for a totally free credit history.
Here's what you might not know: when you subscribe to one of those totally free credit reports, you are also signing up for an additional product being pushed by the business, a credit monitoring service. The very first week of this credit monitoring service is free, but unless you browse the small print you may not know you are being enrolled in a credit monitoring service - until that you finally notice monthly $14.95 charge on your charge card statement.
In plain and simple terms, you're being ripped off.
If credit monitoring is such a valuable service, then how come this company need to trick you into becoming a member of it?
Since identity theft became a significant problem, consumer paranoia has run high. Credit monitoring is really a rapidly expanding niche, with between $650 million to $700 million annually in sales. Millions have signed up for it - even though, via schemes like the one described above, numerous might have signed up unknowingly. But even for people who register willingly, credit monitoring might not be providing an invaluable service.
Credit monitoring services offer customers with immediate details about changes in their credit reports. For some customers - recent victims of identity theft, or someone in the process of rebuilding his or her credit rating - these instantaneous communications might provide a real service. For the great majority of customers, nevertheless, it does not as their credit rating does not change rapidly sufficient to justify the scrutiny. These customers can keep an eye on their credit simply by checking their credit reports a few times every year, and keeping a careful eye on their charge card statements.
The organization that makes those catchy ads has been the defendant in two main lawsuits charging deceptive advertising and company practices. In the last five years, it has needed to pay $1.25 million to stay charges through the government Trade Commission. The recently enacted charge card reform law contains measures directing the Federal Trade Commission to exert pressure on this business yet others participating in comparable practices to be much more transparent concerning the product they're selling. Meanwhile, the wise consumer may be the one who is cautious when coping with businesses that participate in misleading company practices.