Federal Trade Commission – A Credit Monitoring Case for Consumers

October 4, 2016 | By More
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Federal Trade Commission Credit Monitoring for ConsumersOne of the challenges consumers have to watch out for in today’s diverse and complex financial world is identity theft and financial fraud.  Many consumers choose to enlist third-party credit monitoring services to keep a look out for fraud.  Money smart consumers also know that maintaining a solid credit score is really important.  After all, your credit score impacts interest rates paid on a mortgage, car loan, and even influence job opportunities.  In light of the personal finances environment we experience today, we wanted to share a credit monitoring scheme the Federal Trade Commission recently reported on its website.  Here are a few highlights of the case: (1)

√  An online scam “lured consumers with ‘free’ access to their credit scores.”  In turn, without the permission of the consumer, they were set up with a recurring monthly fee of $29.95 for credit monitoring.

√  The company leveraged online marketing to place ads at the top of the search engines using key words like “free credit report.”  In addition, the company posted ads on approximately 50 websites.

√  According to the FTC, ” The defendants violated the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA).”  In summary, these rules don’t allow consumers to be charged for goods or services “via a negative option” unless the seller outlines all the terms a consumer would be billed, obtains their permission to charge them, and provides a “simple way to stop recurring charges.”

The question that comes to mind is, “How do I, as a consumer, avoid being taken in by such a fraudster scam?”  We reviewed some resources that try to respond to this concern.  Below are some general best practice tips for monitoring your own financial records while enlisting general good-sense approaches to managing your personal finances.  In the end, it’s about being on guard, questioning everything, and NOT taking ANYTHING at face value.  One truth to remember is that FREE is NOT always FREE!

Tip #1Run your own FREE credit reports three times a year

We have talked about how to get your free credit report at How to Get a Free Credit Report.  I encourage you to review the blog. In addition to getting a copy of your free credit report, you can read articles like Protect your identity and All about credit reports at the AnnualCreditReport.com website.

Tip #2:  Read the fine print VERY carefully

Both in articles at the Federal Trade Commission and Consumer Reports, it is cited that companies don’t always make the verbiage clear that by using the “free” trial, you’re signing up for a fee-based service.  Be extremely cautious and read every single word that is provided.  It’s what isn’t disclosed in the verbiage that should be a red flag to you.

The Federal Trade Commission published an excellent article and a video at “Free” Trial Offers?  Stop and watch this 2:55 video!

Tip #3:  Sign up for online banking and set alerts

Consumer Reports recommends consumers take advantage of the FREE services that online banking offers.  Set a variety of alerts that keep you informed in real time on activities that occur on your bank accounts and credit cards. Did you know that literally in seconds, you can receive a text or email that your credit card has been used?

Let’s face it.  Money smart consumers know that keeping a handle on your personal finances is time consuming and can be complicated.  But, the best defense is an awesome offense.  Start by reading the resources we have provided below.  And, even now you’ll be better prepared to make better money decisions because you have read today’s blog.  Why?  It’s because you have become a more educated, aware money smart consumer.

We invite you to share today’s blog with friends and colleagues.  The more we educate each other about money matters, the fewer consumers will lose their hard earned money via scams!

News to Read:

FTC to Return Almost $20 Million to Consumers Lured by Credit Monitoring Scheme, Federal Trade Commission, September 27, 2016

Homework:

Identity Theft Protection Services, Federal Trade Commission
*Has a section that specifically addresses credit monitoring services

Monitoring Your Credit Score and Credit Report, The Wall Street Journal

Don’t get taken guarding your ID:  Do-it-yourself safeguards are just as effective as paid services, Consumer Reports, January 2013

Endnotes:

(1)  FTC to Return Almost $20 Million to Consumers Lured by Credit Monitoring Scheme, Federal Trade Commission, September 27, 2016

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Category: Credit, Fraud, Personal Finance News, Scams

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