Why Won't the FTC Stop FreeCreditReport.Com's Bait-and-Switch Ads?

Kudos to The New York Times for running its annual "Why FreeCreditReport.Com Isn't Free" story. Annual? That's right: They wrote a similar story last year, too. (Today's story is more up to date -- the "news" within it actually broke in March.)

It's a feature worth running repeatedly. FreeCreditReport.com is a bait-and-switch -- its service isn't "free" -- and if you use it you'll find your credit card repeatedly dinged for unwanted charges. (Confession: It happened to me!) The unanswered question in the Times' piece is, Why is the FTC letting Experian (EXPN.L) get away with these misleading ads?

As the Times notes, the FTC is now fighting back not with more fines -- or preferably a ban -- but with more ads. You can see the FTC's parody of the FreeCreditReport.com ads here. The newlyweds one even has the bad -tempered bride doing the laundry in the basement, just like the original.

And yet Experian has twice been forced into fines and settlements by the FTC for misleading consumers. Once the fine was $950,000, the second time it was $300,000. But after those fines were paid, all the FTC required of Experian was better disclosure of the non-free aspects of the service. That's right, the FTC is continuing to allow FreeCreditReport.Com to advertise even though its service is not free, in exchange for small print on a web site and a biannual chump-change fine.

The fact that the ads (by The Martin Agency) are still running, to the tune of $58 million a year, indicate that the "service" is profitable despite the fines. Parent company Experian wouldn't run those ads if they weren't making money.

In the meantime, don't use FreeCreditReport.com unless you like disputing bills with your card company and ultimately waiting for new plastic in the mail. Instead, the FTC recommends this credit-check service that is actually free.