In February 2010, new laws will take effect to protect consumers from predatory credit practices.
One of the least noticed parts of the bill is the crackdown on businesses based on the "get a free credit report" model.
Current law allows consumers to obtain one free report from credit agencies per year.
This is helpful to watch for and correct any reporting errors but the all important three digit number used as a benchmark for creditworthiness is not included.
Thousands of consumers have signed up for free credit reports due to wide internet and television advertising promoting this as a "service".
The internet is blanketed by sites offer "free credit reports" where the site owner collects a small fee for each person who signs up (a "lead") and may be paid again if the person buys the product actually being SOLD.
The bad economic times have resulted in thousands of consumers checking their credit.
This has led to underhanded practices, backend selling of useless products and credit repair scams.
Consumer complaints have risen drastically and the volume of those complaints was clearly heard.
Regulations of these companies is included in the new consumer protection laws.
This regulation is needed and will provide scam protection for the public.
There is no downside to regulating the free credit report services - though it may be a deal breaker for the fellow dressed in tights singing jingles advertising the free credit report site.
That particular site advertised enlists consumers to sign up for overpriced "monitoring" of their credit accounts.
The service is basically useless and overpriced.
More importantly, it leaves consumers with a false sense of security as they think they are paying for protection of their accounts and that is not the case.
One of the least noticed parts of the bill is the crackdown on businesses based on the "get a free credit report" model.
Current law allows consumers to obtain one free report from credit agencies per year.
This is helpful to watch for and correct any reporting errors but the all important three digit number used as a benchmark for creditworthiness is not included.
Thousands of consumers have signed up for free credit reports due to wide internet and television advertising promoting this as a "service".
The internet is blanketed by sites offer "free credit reports" where the site owner collects a small fee for each person who signs up (a "lead") and may be paid again if the person buys the product actually being SOLD.
The bad economic times have resulted in thousands of consumers checking their credit.
This has led to underhanded practices, backend selling of useless products and credit repair scams.
Consumer complaints have risen drastically and the volume of those complaints was clearly heard.
Regulations of these companies is included in the new consumer protection laws.
This regulation is needed and will provide scam protection for the public.
There is no downside to regulating the free credit report services - though it may be a deal breaker for the fellow dressed in tights singing jingles advertising the free credit report site.
That particular site advertised enlists consumers to sign up for overpriced "monitoring" of their credit accounts.
The service is basically useless and overpriced.
More importantly, it leaves consumers with a false sense of security as they think they are paying for protection of their accounts and that is not the case.
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