I have personal experience with credit monitoring programs, mainly the product offered by Equifax. My strategy is to toggle it on and off a few times a year, usually twice.
It is expensive, at $19.95 per month, but disclosures are clear, and I take advantage of the offering. Sometimes I use it to see what happens to my FICO score when I open or close an account; other times, I balance out what my statement balances and use it as a way to plan my use of credit if I desire.
By the way, it might sound geeky, but I also read all the disclosures.
If more people did the same, we might not have this issue, which is reported in an article in today’s American Banker:
- Before Alex Biviano was hired as a server by a popular restaurant chain, his prospective employer sought details about his credit. To provide the information, Biviano paid what he thought would be just a $1 fee to TransUnion to see his credit report. But the process ended up costing him a lot more, he says.
- Biviano alleges he was deceived into enrolling in TransUnion’s $20-per-month credit monitoring plan. He is among over 100 consumers who recently have complained to the Consumer Financial Protection Bureau about being unwittingly enrolled in services offered by one of the three credit bureaus that they say they never wanted.
- The charges, which are public on the CFPB’s complaint database, have alarmed consumer advocates. They say the data suggests the credit bureaus — most notably TransUnion — have resumed questionable disclosure practices already identified in prior enforcement actions that effectively trap unknowing consumers into expensive plans they never sought.
Now, I only use Equifax because I like the interface. And, one more time, I read all the disclosures. From the headlines, it is not clear that everyone reads the fine print.
- At least 86 people this year alone have filed complaints with the CFPB saying they had been for charged a fee for TransUnion’s monthly credit monitoring service but that they didn’t recall signing up for the service. At least 27 made similar accusations against Experian, and four similar complaints were filed against Equifax, according to the CFPB data. Many of the complainants said they felt scammed or deceived, with some even alleging fraud.
- Meanwhile, the complaints against the credit bureaus come amid signs that consumers do not know they are entitled to a free credit report through a website operated jointly by the three companies.
- Several consumers claimed that it took months before they even realized they had unintentionally subscribed to a credit monitoring service, racking up charges of as much as $500. Some even said the monthly charge caused them to overdraw their bank account.
- Meanwhile, the complaints against the credit bureaus come amid signs that consumers do not know they are entitled to a free credit report through a website operated jointly by the three companies.
- Several consumers claimed that it took months before they even realized they had unintentionally subscribed to a credit monitoring service, racking up charges of as much as $500. Some even said the monthly charge caused them to overdraw their bank account.
Now, considering that the data indicates most people do not know they are entitled to a free credit report, the expectation that most people do not read the contract terms probably holds true.
For me, the process works fine. The fee is high, but my personal hack is to open and close the service twice during the year. That way, I get enough data at 50% off.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group