Law requires new disclosure on free credit report ads

The down-on-their-luck group of men featured on commercials for will now be accompanied by a message explaining that a free credit report service is offered by the federal government.

Federal legislation enacted Monday requires companies that promote free credit score reports to disclose the existence of the government-sponsored service at on all print, radio, television and online advertisements.

The rule is part of the Credit Card Accountability Responsibility and Disclosure Act, or Credit CARD Act, of 2009 signed by President Barack Obama on May 22 of last year. It established regulations aimed at protecting credit card holders.

Karolina Maslanka, sophomore in LAS, said some television commercials for companies that offer credit reports are so popular that some of her friends have memorized the songs.

She said she supports the government’s effort to protect consumers because she knows people that have had negative experiences with some of the popular companies.

“I think it’s good to know there are other options out there,” she said.

Paul Anderson, sophomore in Engineering, said he thinks the new rule is a violation of free speech.

“When the government is using its power to potentially take away business from the free market, that’s not fair,” he said.

The federal government has offered free credit reports since the passing of the Fair and Accurate Credit Transactions Act of 2003, which guarantees citizens a credit report every 12 months from three national credit reporting companies: Equifax, Experian and TransUnion.

Although Experian is required to offer a free credit report every year, the company owns, which offers a credit report for $1 when the consumer provides a credit card number, according to the company’s Web site.

Kevin Waspi, chartered financial analyst and lecturer in Business at the University, said a frequent comparison of one’s credit card statements with their receipts makes constant electronic credit reports unnecessary.

“Use your personal finances wisely, monitor them with each statement, don’t think that electronic everything is the need of today, and you’ll probably need to look at your credit score just a few times in your life,” Waspi said in an e-mail.“It’s easier to keep the horse in the barn than to try to get him back once he’s out and the door is closed.”

In addition to the advertising regulations, the Credit CARD Act requires a co-signer over the age of 21 on all credit card contracts signed by a consumer under age 21. An underage applicant can sign alone only if the applicant can provide sufficient proof of an income that will support credit card payments.

The act contains regulations that affect college campuses; however, they are similar to those already in place by the Credit Card Marketing Act of 2009, Illinois legislation enacted Jan. 1.

The federal act requires disclosure of contracts signed between universities and credit card companies, prohibits items from being given away to lure students into applying for a credit card on or near campus and advises universities to provide financial education for students.

Full text of the Credit CARD Act of 2009 can be found at