FTC unveils ads for free (really) credit reports

If you watch television, chances are you've seen the catchy commercials for FreeCreditReport.com, in which hapless young victims of identity theft sulk around in beat-up old cars, or get stuck wearing pirate costumes in cheesy restaurants, as a consequence of ignoring their credit records.

The only trouble is that FreeCreditReport.com isn't free. Owned by Experian, one of the three main credit-reporting agencies, the site offers a "free" report in exchange for signing up for a credit-monitoring service. The cost: $14.95 a month.

Now, the Federal Trade Commission has decided to fight fire with fire - or at least to fight catchy commercials with catchy Web videos of its own.

The FTC's videos, unveiled today at a Washington news conference, promote the genuine free-credit-report Web site - www.annualcreditreport.com - that Experian and its two main competitors have been required to operate since 2005. (To see the FTC videos, go to www.ftc.gov/freereports.)

For government products, the Web videos don't pull many punches. Consumer advocates have long complained that FreeCreditReport.com misleads consumers. The FTC's videos - produced for about $100,000 by California's Aperture Films Ltd. - seem to agree, although they refer vaguely to "other sites" rather than to the Experian site by name.

"Beware of the others. There's always a catch," warns a guitarist in one, as Irish step dancers bounce in the background. "They claim to be free, but strings are attached."

In the other, musicians jam in a cluttered apartment shared by twentysomethings.

"Other sites may turn your head. They say they're free - don't be misled," the singer says. "Once you're in their tangled web, they'll sell you something else instead."

In both videos, the refrain points back to "AnnualCreditReport.com, the one you can depend upon."

Nat Wood, an assistant director in the FTC's Bureau of Consumer Protection, said the agency's goal was to use parody and free Web distribution to counter the effects of the FreeCreditReport.com ad campaign.

"We certainly had those in mind," Wood said of the Experian ads. "We know they're in people's minds. Unfortunately, AnnualCreditReport.com is not so much on people's minds."

One problem isn't easily surmounted. The trade publication BrandWeek.com, citing data from Nielsen Monitor-Plus, says Experian's ad campaign for FreeCreditReport.com cost more than $300 million last year alone - well more than the FTC's entire annual budget.

Wood said the agency was hoping to leverage the popularity of Web video to get attention for its ad spoofs. To that end, the FTC site includes a "Grab these videos" button to make it easy for bloggers and others to embed its videos.

"We want people to use these and share them," Wood said. "When you don't have a big advertising budget, partnership is the name of the game."

The FTC's videos may be funny, but it's not clear whether Experian is amused.

FreeCreditReport.com responded to requests for comment with a statement stressing that it provides continuous credit monitoring, not just periodic reports, and noting that its home page provides a link to www.AnnualCreditReport.com.

The statement didn't mention that FreeCreditReport.com was required to provide that link, as well as to clarify that its offer is unrelated to the actual free-report site, under an injunction the FTC obtained in 2005.

At the time, the Experian affiliate paid $950,000 to settle FTC charges that it was deceptively marketing "free credit reports." Two years later, it paid an additional $300,000 fine to settle charges that its ads still failed to adequately disclose that customers would be charged $79.95 for credit-monitoring.