A new Federal Trade Commission (FTC) staff report (release) entitled Using FACTA Remedies: An FTC Staff Report on a Survey of Experience of Identity Theft Victims (report pdf) confirms what we've known all along: The big credit bureaus pressure identity theft victims into buying overpriced, underperforming credit monitoring subscription packages. The report also finds that the credit bureaus don't have enough human beings to answer the phones. That could be because the operators aren't standing by, instead they are badgering other victims into buying their overpriced, underperforming credit monitoring subscription packages. In 2000, the FTC did fine the 3 credit bureaus a total of $2.5 million (Operation Busy Signal) for not having enough people to answer the phone. My question: Why don't they fine them again? It's 12 years later and they still don't have enough people to answer the phones.
The report also found that while most consumers were generally ok (68%) with the help they received from the bureaus, fewer than half understood their identity theft rights before they called the bureaus. More on identity theft rights from the authoritative Privacy Rights Clearinghouse.
Excerpt regarding pressure to buy overpriced products: "Several respondents and focus group participants complained that they felt pressured to buy one or more products and that, in some cases, they received services that they did not want or need. Given these incidents, the Consumer Financial Protection Bureau, which has examination and
rulemaking authority in this area, may want to address these practices. In addition, to the extent any marketing of identity theft protection products involves unfair or deceptive practices, the Commission retains authority to bring enforcement actions to protect against such conduct."
Credit monitoring products that cost as much as $12/month or more do not stop identity theft nor do they raise your credit score. You're better off requesting your annual free credit reports required by law on a staggered basis -- one from each of the 3 bureaus (Experian, Trans Union and Equifax) every four months, as a free early warning system. But you need to order them through the central annualcreditreport.com (this link is actually to an FTC page with more information about free credit report rights, including how to get to annualcreditreport.com or order by mail or phone). You also have rights if you think you are a victim of identity theft or have recently been denied credit. If you live in one of seven states, you also get an additional free report annually under state law, although you may need to call the bureau to request this one: Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey and Vermont.
By the way, the only other time that I am aware of an FTC penalty against a credit bureau (they seem to skate on the mistakes, all the time) involved Experian's deceptive practices implying that its credit monitoring products were related to the government free report requirement. It was fined twice, in 2005 and 2007. Along with other advocates, I remain truly unimpressed with the outcome, since Experian now offers both a freecreditscore trial product (score, not report), with a ludicrously short 7-day cancellation period to avoid subscription fees as well as a "$1 freecreditreport.com" ($1, not free) product with a 7 day trial that "may only be available for 5 days during your trial period since enrollment can take up to 2 days." (You do not have to make this stuff up, it writes itself.) Danger, Will Robinson! Link is hazardous! Including this link for educational purposes is not an endorsement of the contents of the page; please do not buy anything or try the trial offers!