Class Action Claims Consumers Are ‘Tricked’ into Agreeing to Hidden Terms on FreeCreditReport.com

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action alleges Experian has falsely advertised its purportedly “free” credit report service given the company hides the offer’s unfavorable terms and conditions from consumers.

Want to stay in the loop on class actions that matter to you? Sign up for ClassAction.org’s free weekly newsletter here.

Specifically, the 31-page lawsuit accuses Experian Information Solutions, Inc. and subsidiary ConsumerInfo.com, Inc. of operating a “bait and switch” scheme on FreeCreditReport.com whereby consumers are “lure[d]” by the use of the term “free” into agreeing to Experian’s terms of use. The suit alleges the terms contain a number of “one-sided” conditions that waive consumer rights, including an agreement to allow the credit reporting agency to market and sell a customer’s personal data to third parties, a liability waiver, a ban on class actions and an agreement to arbitrate any claims against Experian.

The case claims that, importantly, these material terms are not clearly displayed next to the use of the word “free,” in direct violation of the Federal Trade Commission’s (FTC) regulations governing the use of the term.

“Consumers who think they are signing up to receive their free credit reports, something Experian is required by law to provide to consumers anyway and does on a different website, are duped by the term ‘free’ into having their information sold and being subjected to unsolicited advertisements and other use of their private financial information by third parties,” the complaint contests. “Further, if they want to object to it, [Experian] tricked them into allegedly agreeing to arbitrate those claims to prevent consumers from vindicating their consumer and privacy rights in court.”

According to the filing, every consumer has the right to obtain their credit report for free through AnnualCreditReport.com, pursuant to the federal Fair and Accurate Credit Transactions Act. The lawsuit claims that soon after that website was established, Experian created and began advertising FreeCreditReport.com—a “parallel, alternative website” that “found a way to charge consumers for this ‘free’ product” and “distracted from the actual free credit report site mandated by the statute.”

As the suit tells it, a consumer who wishes to obtain a credit report on FreeCreditReport.com must agree to Experian’s terms of service. However, the defendant does not require customers to scroll through the agreement or verify that they have read it before moving on, the case points out.

In fact, despite the FTC requirements that such terms and conditions be readily available “in close conjunction” with the “free” offer, a consumer must click through multiple levels of links in order to find the terms of use at all, the complaint alleges.

The filing contends that within Experian’s terms of use are various provisions that benefit only Experian, including an agreement allowing the credit reporting agency to keep copies of consumers’ credit information and share it with third parties for marketing purposes, a statement that the terms can be changed at any time, an agreement that consumers must arbitrate “any and all claims” against Experian, and a limit on credit reports to one new report every 30 days.

Per the case, Experian has already faced FTC actions over its credit report marketing practices in 2007 and 2017.

The lawsuit looks to represent anyone in the United States and its territories who responded to Experian’s internet advertisement for a free credit report by enrolling in FreeCreditReport.com within the past five years.

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.