Monday, October 27, 2008

Problems With Free Credit Reports

It is wise to check your credit reports to verify you have not become a victim of fraudulent financial activity. Ironically, you will need to take steps to avoid becoming a victim of fraud when accessing free credit reports. Some websites promise free reports, but tack on paid services, and others seek to steal people's identities.

Paid Services

    The U.S. Federal Trade Commission website notes that by law, consumers can request one free credit report from each of the three major credit bureaus every year. However, the FTC warns that Annualcreditreport.com is the only website authorized to fill requests for those free reports. Other companies advertise that they provide free credit reports and free credit scores to consumers, but some of those products are part of paid services. In some cases, a website might offer you a free credit report in exchange for subscribing to a credit-monitoring service that tracks any changes made to your credit reports. Other companies offer free credit monitoring for a trial period that converts to a paid service if you don't cancel it before the trial expires.

Website Addresses

    The FTC also warns consumers about website addresses used to mislead them with misspellings of Annualcreditreport.com. According to the FTC, people who set up such sites hope to gain customers by mimicking the official site. If you sign on with one of these sites, you could end up paying for reports that should be free. Furthermore, you could have your identity stolen by sites that collect your personal information and use it to open credit accounts or take out loans in your name.

Proxy Sites

    The security policy published at Annualcreditreport.com also points to potential problems with requesting free credit reports. The site policy encourages users to type its official website address into their browser's address bar to ensure they haven't accessed a fraudulent site. The site also urges you not to access its free credit report service through links sent to you from other websites, to avoid potential problems with proxy sites. Some proxy sites seek to trick people into disclosing confidential information that could result in identity theft. That can occur through phishing, which involves sending emails that include false claims of affiliation with a legitimate organization. The senders direct people to fraudulent websites that collect personal information.

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