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Free Credit Report Ads are Under Scrutiny

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You know those catchy commercials where some guy is telling you that you should order a “free credit report” to protect your credit.  Well, so does the Federal Trade Commission, and they’re not too happy about them.

In particular, they think using the term “free” by these companies is misleading. Many people don’t realize that these free credit report companies are not merely offering a free credit report; in fact, they are trying to sell credit monitoring services.

Credit Monitoring Services for Sale

In fact, if an individual orders a “free” credit report through one of these companies they are often lured into signing up for credit monitoring services. Credit monitoring services are essentially memberships that charge monthly fees to update consumers on any credit activity taking place on their credit report.

These memberships are often automatically withdrawn from an individual’s account on a monthly basis and, because many consumers are unaware of how this membership works, they end up being charged for a service that they simply don’t want.

Consumers’ Rights regarding Annual Credit Reports

The FTC seems to have the biggest problems with these commercials because the people calling these companies are simply looking for a free copy of their credit report. What many people don’t realize is that everyone is entitled to a free copy of their credit report on an annul basis from all three of the nation’s credit reporting agencies (TransUnion, Experian and Equifax). Individuals are also entitled to a free copy of their credit report anytime they are denied credit.

Are Credit Monitoring Services Right for you?

Credit monitoring services are memberships that closely monitor an individual’s credit report for any and all signs of activity. The purpose of these sights is to catch unauthorized activity as soon as it occurs. For some individuals, these services may be quite helpful and may help provide peace of mind. However, for most individuals, a quick check of their credit on an annual basis is all they need to keep track of their credit report.

Payday Loan Scams Flourish as Access to Consumer Credit Slows

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As the economy struggles and banks and creditors tighten their belts, many Americans are caught in a precarious situation of not being able to make ends meet until their next paycheck.

It therefore comes as no surprise that cash-advance lenders are now using the lack of consumer credit to their advantage. With credit cards maxed or canceled, and personal loans nearly impossible to come by, many consumers are looking to their short-term cash solutions, which is where cash advance loans, often referred to as payday loans, come into play.

Although most cash advance lenders are reputable, there are a few that are looking to scam consumers and make a quick buck.

If you do not have access to cash or credit, and you are in a financial bind, you may look to cash advance loans for your short-term cash flow problems. From a broken down vehicle to an overdue gas bill, millions of Americans use payday loans ever year.

However, it is important to understand that all payday loans are not created equal, and that you should be aware of some of the signs of a possible payday loan scam:

• The online payday loan company does not have a mailing address or telephone number. Many scams do not have solid mailing address and telephones, thereby making the process of finding them much more difficult.
• The payday lender solicits you by phone, as payday lenders are prohibited from doing this under the Federal Trade Commission laws. Never respond to any type of solicitation over the phone, and certainly never provide them with your personal information.
• The payday lender asks that you wire money to them before you can receive your payday loan. A payday loan should never cost you any upfront money, so if a payday lender is requesting upfront money, move on.
• The payday lender asks for your personal information over the phone or Internet and the Internet connection is not secure. Many online payday lenders feature easy, online applications; but make sure the Internet connection is safe – and that the lender is someone you know – before providing any information.
• The payday lender is located outside of the country.

Useful Information about the Fair Credit Reporting Act

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What you don’t know about the Fair Credit Reporting Act could cost you.

The Fair Credit Reporting Act (FCRA), which is enforced by the Federal Trade Commission, is a federal act designed to ensure that consumers’ privacy is protected and that the credit reporting agencies maintain accuracy and abide by certain responsibilities.

Perhaps one of the most important features about the FCRA is that consumers are entitled to a copy of their credit report from all three, national credit reporting agencies – Equifax, TransUnion and Experian – once a year.

There are also other instances in which you may be entitled to a free credit report:

• - If you have been denied for credit, insurance or employment (you must ask for a copy of your credit report within 60 days of being denied)
• - If you are unemployed and plan to begin looking for a job within the next 60 days
• - If you are on welfare
• - If you have been a victim of fraud or identity theft

Under the FCRA, you also have rights regarding inaccuracies which appear on your credit report. The credit reporting agency in which the inaccuracy appears, as well as the creditor who provided the information, have an obligation and a responsibility to investigate and correct the inaccuracy within 30 days.

Simply inform the credit reporting agency in writing. The credit reporting agency must then forward the information to the creditor, who must then investigate and review the information and report back to the credit reporting agency.

Upon resolution of the inaccuracy, the credit reporting agency must provide you with the written results of the investigation, as well as a new copy of your credit report (if the dispute results in a change on your credit report).

Finally, the FCRA recognizes that the only individuals who can obtain a copy of your credit report are those individuals with legitimate business needs. In addition, your employer may only access your credit report upon your approval.

If you have experienced violations of the FCRA, you should report it directly to the Federal Trade Commission at:

Consumer Response Center — FCRA
Federal Trade Commission
Washington, D.C. 20580.