Operators Of “Free Access To Credit Scores” Scam To Return $22M To Victims
Consumers looking for a good deal might be tempted to take unknown companies up on their offer of providing credit scores for free. But those promises can often be too good to be true. Just ask consumers bilked out of millions of dollars after falling for once such “deal”.
The Federal Trade Commission, in collaboration with the state attorneys general for Ohio and Illinois announced today that they have put a stop to an alleged online scheme promising free credit scores to consumers and ordered the operators to refund victims $22 million.
According to the FTC complaint [PDF], One Technologies LP – also doing business as ScoreSense, One Technologies Inc., and MyCreditHealth – One Technologies Management LLC, and One Technologies Capital LLP allegedly lured consumers with a promise of free access to their credit scores and then billed them a recurring monthly fee of $29.95 for a credit monitoring program they never wanted.
The defendants allegedly marketed their credit monitoring programs, MyCreditHealth and ScoreSense, through at least 50 websites, including FreeScore360.com, FreeScoreOnline.com and ScoreSense.com.
To reach more consumers, the FTC claims the operators bought advertising on search engines such as Google and Bing so that ads for their websites appeared near the top of search results when consumers looked for terms such as “free credit report.” The most prominent ad stated, “View your latest Credit Scores from All 3 Bureaus in 60 seconds for $0!”
The complaint claims the defendants failed to clearly disclose that consumers who accessed their credit score through their websites would be enrolled in a credit monitoring program and incur monthly charges until they called the company to cancel.
The only way consumers could cancel their membership and request a refund was to call a toll-free number.
Consumers reported difficulty obtaining the cancellation and refund, telling the FTC they would have to make repeated calls to the toll-free number. And more often than not the defendants refused refunds to those who claimed they did not knowingly enroll.
In all, nearly 210,000 consumers contacted banks, credit card companies, law enforcement agencies, and the Better Business Bureau to complain about the scheme, the FTC reports.
The FTC alleges that the companies violated the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA), which prohibits charging consumers for goods or services sold online via a negative option unless the seller clearly discloses all material terms before obtaining the consumer’s billing information, obtains the consumer’s express informed consent before making the charge, and provides a simple way to stop recurring charges.
Additionally, the companies were charged with violating the Illinois Consumer Fraud Act and the Ohio Consumer Sales Practices Act.
In addition to the consumer refunds, the defendants are permanently prohibited from violating ROSCA, misrepresenting material facts about any product or service marketed with a negative option, misrepresenting material terms of any refund or cancellation policy, and failing to clearly disclose, before a consumer consents to pay via a negative option, all materials terms of any such policy.
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