Skip to main content

FTC Alleges Ads For “Free” Credit Report Violate Federal Court Order, doing business as Experian Consumer Direct, will pay $300,000 to settle Federal Trade Commission charges that ads for its “free credit report” offer failed to disclose adequately that consumers who signed up would be automatically enrolled in a credit- monitoring program and charged $79.95. The FTC alleged that the failure to clearly disclose the enrollment and charges violated a previous settlement.

In August 2005,, paid $950,000 to settle FTC charges that it deceptively marketed “free credit reports.” According to the FTC, Consumerinfo offered consumers a free copy of their credit report and added that they would provide “30 FREE days of Credit Check Monitoring.” The FTC alleged that Consumerinfo’s advertising and Web sites failed to explain adequately that after the free trial period for the credit-monitoring service expired, consumers automatically would be charged a $79.95 annual membership, unless they notified the defendant within 30 days to cancel the service. Consumerinfo billed the credit cards that it had told consumers were “required only to establish your account” and, in some cases, automatically renewed memberships by re-billing consumers without notice. In addition to the $950,000 payment, the settlement required Consumerinfo to pay redress to deceived consumers, barred deceptive and misleading claims about “free” offers, and required clear and conspicuous disclosure of terms and conditions of any “free”offer.

The FTC alleges that ran ads after the settlement that violated the disclosure requirement. The settlement requires Consumerinfo to give up $300,000 in ill-gotten gains, and bars it from misrepresenting any affiliation with the annual credit report available to consumers under the Fair Credit Reporting Act.

The stipulated judgment and order named, Inc., doing business as Experian Consumer Direct, Qspace, Inc., and Iplace, Inc.

The Commission vote to accept the supplemental stipulated judgment and order was 5-0. It was filed in United States District Court for the Central District of California in Los Angeles.

NOTE: Stipulated judgments and orders for permanent injunction and monetary relief are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Stipulated judgments have the force of law when signed by the judge.

Copies of the legal documents associated with this case are available from the FTC’s Web site at and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.


Claudia Bourne Farrell,
Office of Public Affairs


Malini Mithal,
Bureau of Consumer Protection

(FTC File No. X05 0065)
(Civil Action No. CV SACV05-801 AHS (MGx))