Profiting Off Debt

I feel like I see ads for the deceptively-named "Free Credit Report" more and more and more, as if the worse the economy gets, the more companies seek to prey on those who are struggling.

As you may know (but obviously not enough do), Free Credit Report is a bait-and-switch campaign from the private credit bureau Experian. The omnipresent ad campaign offers the debt-ridden a "free" credit report service to help them regain good credit, barely mentioning that it only comes with enrollment in the never-explained "Triple Advantage" program. Also never explained is that, thanks to 2005 federal law [1], anyone can get an actual free credit report from AnnualCreditReport.com. [2]

Consumerist [3] recently reported an anecdote showing how the scam sucks money out of the unwitting:

Jesus from South Texas signed up for credit monitoring at the notoriously scammy FreeCreditReport [dot] com. He never received the confirmation email and wasn't able to access his account, so he never used it, but forgot to call to cancel it. After three months he realized he was being charged $15 a month as per their terms of service, so he went to their site to retrieve his login credentials and was told the account didn't exist. After that, it took him 4 calls to get the account canceled, and they would only refund him for one month of service. One of their CSRs tried to scare Jesus into keeping the account open because there had been some "suspicious activity" in his credit history that he'd be wise to monitor. Then they told him there is no phone number or email for their "customer satisfaction department"—it can only be reached through snail mail.

MSNBC.com's Red Tape Chronicles [4] gave a definitive take down of the scam in 2006, one year after Experian was "slapped on the wrist by the Federal Trade Commission for misleading consumers." Reporter Bob Sullivan said, "it’s amazing that FreeCreditReport [dot] com is allowed to continue operating." Perhaps it's not so amazing that MSNBC, like several other cable channels, continues to air those misleading Free Credit Report ads, ad naseum.

What's particularly noticeable about the latest phase of the ad campaign is the relentless focus on young men [5] (i.e. "I didn't know that my credit was whack").

Clearly, the company sees a huge market opportunity in 20something males struggling with debt. Not middle-aged folks hit with a sudden, cyclical economic downturn. But folks stuck in a hole essentially from the beginning of adulthood -- fleeced by credit card companies, weighed down with student loans and faced with diminishing economic opportunities.

That speaks to a fundamental problem with how our economy is functioning. That we are not in a mere rough patch that will work itself out. But the economy is structurally out of whack -- starved for public investment in education, health care, technological research and physical infrastructure. And having a government acting not as corporate watchdog, but corporate lapdog.

If we are to get our economy truly back on track. we need to return to investment in the next generation and our infrastructure, and return to real oversight of corporate behavior.

In the meantime, make sure you never ever ever use Free Credit Report [dot] com.