Credit Bureaus Ply ID Theft Victims to Buy More Protection

NEW YORK (MainStreet) — Some victims of identity theft reported feeling pressured by credit bureaus into buying additional identity theft monitoring products when they use their services, says a new report from the Federal Trade Commission.

The report also found that while customers were generally satisfied with the customer service they received from the credit bureaus, they often felt it was difficult to get in touch with a live person to handle their complaints. A large majority of ID theft victims also weren’t aware of the rights they are entitled to under the Fair Credit Reporting Act. These include the ability to request a free credit report when placing a fraud alert, to block fraudulent information from appearing on their credit report, and to receive a notice of these and other rights from the consumer reporting agencies, among other things.

As a result of the report’s findings, the FTC is recommending that the Consumer Financial Protection Bureau and other government agencies “use their respective authorities to address the consumer reporting agencies' practices related to selling identity theft monitoring products or services when they are contacted by identity theft victims.”

The CFPB proposed a rule in February that would add credit reporting agencies to its jurisdiction.

As MainStreet has previously reported, in addition to furnishing credit reports and scores to both lenders and consumers, most credit bureaus offer several different types of identity theft protection that alerts customers when something on their report changes. But these services are often so plentiful and varied it can be hard for consumers to understand what it is they’re paying for.

It can even be hard to understand when they’re opting into such a program at all and, beyond the original enrollment, many bureaus will still try to upsell a customer. For example, they make ask if you want to pay for reports from all three major credit bureaus – Experian, Equifax and TransUnion, which control a large chunk of the credit reporting industry – instead of just the one you are already signed up to receive.

Last month, MainStreet suggested that the Consumer Financial Protection Bureau create a mandatory disclosure form to make it easier for consumers to understand the price of the identity theft monitoring services and compare competing services to one another. You can find out more about this in MainStreet’s look at 3 Ways the CFPB Can Improve the Credit Reporting Process!

—Jeanine Skowronski is staff reporter for MainStreet. You can reach her by email at Skowronski.jeanine@thestreet.com, or follow her on Twitter at @JeanineSko.