Through at least 50 websites, they marketed their credit monitoring programs, MyCreditHealth and ScoreSense, under such names as FreeScore360.com, FreeScoreOnline.com and ScoreSense.com.
But the operators of these sites lured consumers with “free” access to their credit scores and then billed them a recurring fee of $29.95 per month for a credit monitoring program they never ordered, the Federal Trade Commission alleges.
In a settlement with the FTC and the state attorneys general in Illinois and Ohio, the three companies named in a complaint have agreed to pay $22 million for consumer refunds.
The FTC and the state attorneys general allege that the defendants 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.
The site operators 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 defendants to cancel.
At least 210,000 consumers contacted banks, credit card companies, law enforcement agencies, and the Better Business Bureau to complain about the scheme.
The FTC says: “The only way consumers could cancel their membership and request refunds was to call a toll-free number. Consumers often had to make repeated calls to secure their cancellation or refund. The defendants often denied refunds to those who claimed they did not knowingly enroll.”