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FTC Nails Credit Report Firm For $950,000

The Federal Trade Commission has settled with, one of the largest firms marketing "free" credit reports to consumers, for nearly a million dollars in fines. The deal is part of a crack down on so-called "imposter" sites of, where consumers really can obtain one free credit report each year.

The Federal Trade Commission on Tuesday settled with one of the largest firms marketing "free" credit reports to consumers for nearly a million dollars in fines., which operates several Web sites that shilled free credit reports, has agreed to give up $950,000, the FTC said in a statement, and refund consumers.

According to the FTC, used e-mail and Web ads, as well as TV and radio spots, to drive consumers to a pair of Web sites, and At those sites, Consumerinfo marketed "free credit reports," but didn't properly disclose that consumers were automatically registered for a credit report monitoring service and charged $79.95 if they didn’t cancel within 30 days.

Consumers were required to provide detailed personal info and a valid credit card to get their free credit report. assured them that, "Your card will not be charged during the free trial period. However, valid credit card information is required to establish your account."

"Consumers paid the price for ordering free credit reports from,” said Lydia Parnes, the director of the FTC's Bureau of Consumer Protection, in a statement. "It’s unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn’t want in the first place."

As part of the settlement, Consumerinfo will be required to refund consumers who unknowingly signed up for Consumerinfo's credit monitoring program between 2000 and 2003. The $950,000 fine, meanwhile, will be applied to consumer education programs by the FTC.

The FTC is cracking down on so-called "imposter" sites of the legit, where consumers really can obtain one free credit report each year.

"Consumers need to be alert about sites that misspell or use sound alike names, but don’t link to the authorized site," said Parnes. "We are sending letters to operators of more than 130 impostor sites to inform them that we know they are out there and that attempts to mislead consumers are illegal."

In mid-July, the World Privacy Forum published a report which identified over 100 such imposter sites, a 124 percent jump in such fraudsters since February, and noted that these sites tried numerous tricks to pry personal information, such as Social Security and credit card account numbers, from users.

Credit reports are an important weapon in the defense against identity theft, most experts have said, since checking one's report is one of the few ways to see if any nefarious activity is taking place.

In fact, the majority of identity theft cases are self-discovered, in other words, uncovered by the victim before his or her financial institution notices anything untoward.

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