Experian to Pay $300,000 FTC Settlement

Consumerinfo.com, 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 those who signed up would be automatically enrolled in a $79.95 credit- monitoring program.

The FTC also alleged that Experian’s failure to clearly disclose the enrollment and charges violated a previous settlement.

Qspace Inc. and Iplace Inc. were also named as defendants.

In Aug. 2005, Consumerinfo.com 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 further alleged that Consumerinfo’s advertising and Web sites failed to explain adequately that after the free trial period 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, according to the FTC.

In addition to the $950,000 fine, 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, according to the FTC.

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

The case is on file in U.S. District Court for the Central District of California in Los Angeles.