FTC Seeks Comments 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 consumers’ 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 proposes a requirement that, before the consumer may obtain a credit report from that Web site, such site must first display a separate landing page with the required disclosure: “This is not the free credit report provided for by Federal law. To get your free report, visit www.AnnualCreditReport.com or call 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 they 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 annual credit reports. The Commission proposes to amend the Rule by delaying such advertising until after consumers obtain their free annual credit reports, and by requiring other measures.

The proposed rules can be found on the Commission’s Web site as a link to this press release. The proposal will soon be published in the Federal Register, and the comment period will end on November 30, 2009. The Commission vote authorizing the publication of the Federal Register notice was 4-0.