Rule Clarifying Online ‘Free Credit Report’ Offers in Effect

A new Federal Trade Commission rule that helps consumers avoid confusion over those ads for “free credit reports” – which often require them to buy credit monitoring or other services – takes effect today.

Those ads must now include disclosures telling consumers that they can obtain one free credit report from each of the three reporting bureaus for free under federal law.

Websites promoting “free credit reports” also must have a disclosure across the top of each page that includes links to AnnualCreditReport.com – the official site for U.S. consumers – and FTC.gov.

The consumer reporting agencies – Equifax, Experian, and TransUnion – must delay advertising for products or services on AnnualCreditReport.com until after consumers get their free credit reports, according to the new rule.

The FTC rule’s print and website requirements take effect today, April 2, but disclosure requirements for television and radio ads take effect on September 1, 2010.

The popularity of television commercials featuring a band of slacker musicians lamenting their poor credit has elevated the issue of misleading “free credit report” promotions.

The FTC came up with a parody of that commercial to help set the public straight on truly free credit reports.