Credit Score Companies Fined $22M by FTC for Illegal Billing

The Federal Trade Commission announced a settlement this week in which three credit score companies will pay consumers $22 million for billing them for credit monitoring products they never ordered. The companies drew customers to their sites by offering free credit scores, but signing up set off a $29.95 recurring monthly fee for credit monitoring, which customers didn’t know about.

In this case, more than 50 websites marketed MyCreditHealth and ScoreSense products, and the companies bought ads for free credit scores, with the most prominent ad reading “View your latest Credit Scores from All 3 Bureaus in 60 seconds for $0!” according to an FTC release on the settlement. The companies include: One Technologies LP, also doing business as ScoreSense One Technologies Inc. and MyCreditHealth; One Technologies Management LLC; and One Technologies Capital LLP.

The FTC and attorneys general in Ohio and Illinois filed a complaint in the U.S. District Court of Northern California saying the companies did not clearly tell consumers that getting their free credit scores through their websites automatically enrolls them in the credit monitoring programs. Once enrolled, customers could only cancel or request refunds through an 800-number, and people said it often took multiple calls to confirm the cancellation or refund. The complaint says the companies often denied refunds to customers who said they didn’t knowingly opt into the service.

The three companies were charged with violating the FTC’s Restore Online Shoppers’ Confidence Act, the Illinois Consumer Fraud Act and Ohio Consumer Sales Practices Act, and they agreed to pay $22 million in consumer refunds in a settlement with the FTC and attorneys general in Illinois and Ohio.

To be clear: There are several websites and financial services companies who offer truly free credit scores and require no payment information to access the scores — Credit.com is one of them — but there are also many that require payment or a credit card. It can be confusing for consumers, so make sure you thoroughly read the terms of agreement for any credit product before giving a company your payment information.