Truth 41 When a free credit report isn’t free

With identity theft being such a hot topic these days, it’s no doubt that you have seen the commercials, heard the radio ads, or seen the Web page banners offering free credit reports. In fact, you’ve probably thought seriously about getting a free credit report, especially if you have been reading along in this book about the horrors a dedicated identity thief can inflict upon you. Just know that much like most things in life, “free” things usually have strings attached.

When “free” actually means “monthly charge”

After hearing all the media hoopla about identity theft, you decide to visit a free credit report site. After searching for “free credit report” in Google, you come across a professional-looking Web page offering a free credit report. The form prompts you for your name, address, phone number, and email address. Next, the site requests your social security number, date of birth, and credit card information. But you just finished reading The Truth About Identity Theft, and you are no fool. So you check to make sure you are at a legitimate site. You verify with the Better Business Bureau that the company is legitimate and notice it has several certificates on its Web site that do track back to prove it actually is who it says it is. Satisfied, you go back to the Web site and continue.

You do notice that the right side of the screen shows a checkout statement. You look closer and see that the itemized list includes a free credit report, free credit score, free credit monitoring, online delivery, and 24/7 access to your report, all free. After entering all your confidential information, you are asked to read and approve a license agreement. You quickly scroll through it, but at 460 lines, you would need to be an attorney to have a clue what it means.

You complete the form, and within a few minutes you have your credit report. A month or two passes, and you notice a strange charge of $12.99 appearing on your credit card statement. After some searching, you discover that the company that provided your free credit report has just charged you $12.99. So you visit the site again and reread the license agreement. You notice that in small print, the company told you that by getting this free credit report, you are signing up for a free 30-day enrollment in its credit watch program. After the 30 days, you will be charged $12.99 a month to continue the service. Further, the license agreement states the following:

“You may cancel your Credit Monitoring membership at any time during the trial period without charge. If you wish to continue your membership in Credit Monitoring beyond the trial period, do nothing and your membership will automatically continue without interruption. The monthly fee (plus sales tax, if applicable) will be charged to your credit card account at the conclusion of the trial period and your membership will continue automatically, billable monthly at the prevailing rate.”

Sure enough, you didn’t actually get a free credit report. What you got was a credit monitoring service that gives out a free credit report with purchase. Technically speaking, the company did nothing wrong. Sure, it was easy to be misled, but had you read all the fine print, you could have caught on to what was happening. Don’t feel bad, though. You’re not alone. At www.ripoffreport.com, there are hundreds of complaints from people who have fallen for similar offers.

There is some good news. You can get free credit reports online from a site that is sponsored by the three reporting agencies. In fact, under federal law, you have the right to receive one free credit report from each of the three agencies every 12 months. Visit www.annualcreditreport.com. If you are not able to go online or are uncomfortable submitting your confidential information online, you may also request your report via the phone at 1-877-322-8228.

While you are allowed to request all three reports at the same time, I recommend that you stagger the requests so that you receive a different report each four months so that your reports will span the entire year.

Identity theft protection

While monitoring your credit is important, many people have decided that they would rather pay an organization to protect their identity than do it themselves. You may have seen the commercials where the CEO of one of these identity theft protection companies gives out his social security number on national television and explains that he doesn’t have to worry because he uses its service. It’s a convincing ad. So what it is doing to protect your identity that allows the CEO to be so confident that he is willing to give out his social security number?

All these companies are doing for you is setting an automatic 90-day fraud alert and then renewing it every 90 days. They also remove you from mailing lists and order free credit reports in your behalf. All that is helpful, but you can do those things yourself. The only thing most of these companies offer that you can’t do for yourself is providing identity theft insurance coverage. Check with your insurance agent, however, to see if your homeowner’s insurance offers identity theft coverage at a fraction of the cost.

If you are busy, have the expendable income, and are willing to pay for the convenience, using one of these services will definitely keep you more secure than doing nothing. If you think you can remember to fill out a form once every 90 days, request your credit reports every four months, and your homeowner’s insurance provider can cover you for far less, I would suggest not spending your money for professional identity theft protection.

In the end, it all comes down to doing something. Don’t just wait until something is done to you.