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FTC Tags Site Again for Deceptive Ads - InternetNews.
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FTC Tags Site Again for Deceptive Ads

In August of 2005, Consumerinfo.com paid a $950,000 fine to the Federal Trade Commission (FTC) for deceptive advertising practices.

The company, doing business as Experian Consumer Direct, Wednesday agreed to another $300,000 FTC settlement for failing to mend its ways.

According to the FTC, Consumerinfo.com advertised "free credit reports" to consumers but failed to adequately disclose that those who signed up would be automatically enrolled in a credit-monitoring program and charged $79.95.

The FTC claims the failure to clearly disclose the enrollment and charges violated its August 2005 settlement with the agency. The FTC alleges that Consumerinfo.com ran deceptive ads after the 2005 settlement.

In addition to the $300,000 settlement, Consumerinfo.com is prohibited from misrepresenting any affiliation with the annual credit report available to consumers under the Fair Credit Reporting Act.

According to the 2005 FTC complaint, Consumerinfo.com drove consumers to its Web sites with radio, television, e-mail and Internet ads that promised free credit reports. In addition, the company offered what was billed as free trials of a credit-monitoring service.

To qualify for the service, consumers were required to provide detailed personal information and a valid credit card account number. After the free trial period expired, consumers were automatically charged a $79.95 annual membership, unless they notified the Consumerinfo.com within 30 days to cancel the service.

The 2005 complaint also alleges that Consumerinfo.com billed the credit cards that it had told consumers were "required only to establish your account." The FTC also claimed that, in some cases, the company automatically renewed memberships by re-billing consumers without notice.