UPDATE: Corrected old urls: 2/07] [A few comments before the actual news release: (1) See also our related recent blog entry on "free to pay scams. (2) Note also that the FTC cites a complaint by EPIC's Chris Hoofnagle (his blog) that helped lead to this settlement." (3) See PIRG's identity theft website for more information on how to avoid these scams.]

FOR IMMEDIATE RELEASE 16 Aug 2005
CONTACT Ed Mierzwinski, 202-546-9707x 314

Statement of U.S. PIRG Consumer Program Director Ed Mierzwinski on FTC Settlement with Experian over Deceptive Free Credit Report Offers

“While we wish the penalty imposed on Experian were much higher than $950,000, we hope that this important FTC settlement serves as a wake-up call to credit bureaus and others that preying on consumers seeking their government-mandated free reports is wrong and will be punished. Experian deserves greater punishment for three reasons:

First, Experian took advantage of consumers scared of identity theft and credit reporting mistakes. These two major problems are partly caused by sloppy practices of Experian and the other credit bureaus, so Experian shouldn’t be allowed to run a kind of protection racket based on its inability to do a better job keeping credit reports accurate and safe from use by thieves.

Second, Experian stooped so low as to take advantage of consumers seeking to invoke government-ordered rights to get credit reports for free and tricked them into paying for its own over-priced and unnecessary credit monitoring service.

Third, Experian used the widely discredited trial offer gimmick known as “free to pay.�? Consumers thought that they were receiving their government-mandated free credit reports, but worse, they were instead signing up for a deceptive trial offer for an over-priced credit monitoring service that required them to cancel or be billed $79 or more.

For these reasons, we commend the FTC for its important action and for alerting consumers about numerous other scam sites offering free credit reports. Because Experian, however, is one of the nation’s largest credit bureaus, and has been fined for violating credit reporting laws before, it should have been punished more harshly for its abuse of the public’s trust.�?
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U.S. PIRG is the national lobbying office for state Public Interest Research Groups, which are non-profit, non-partisan public interest advocacy organizations. U.S. PIRG’s consumer website is www.uspirg.org/consumer