PARAMOUNT MORTGAGE - LENDER'S BLOG

December 31st, 2009 9:17 AM

 

Are Free Credit Reports Really Free?

Reported by Bottom Line Personal Newsletter

Bottom Line on the News reported in their publication last week that consumers are being duped into ordering free credit reports online that aren't really free.

Unwary consumers that visited www.FreeCreditReport.com for example, and subsequently signed up for a free credit report, found themselves enrolled in a $14.95 per month credit monitoring service. The company's web site and TV ads all proclaim that your credit report is free, but smaller, easy-to-miss print on the site states that if you click to order your free report you are enrolled in the company's monthly pay-as-you-go credit monitoring service.

The Better Business Bureau has received more than 10,000 complaints about this practice. Greg McBride, CFA and a senior financial analyst from Bankrate.com states "unless you cancel your subscription within seven days" you'll be stuck with the monthly service charge.

There is a better way to order a free credit report. Go to www.AnnualCreditReport.com for a really free credit report.

New Rules Prohibit Deceptive Advertisements

Consumers are faced with myriad decisions about securing a home mortgage. Their task is much more difficult when advertisements they use to select a mortgage product are misleading. New rules effective October 1, 2009 prohibit seven common deceptive ad practices.

The new rules are Federal Reserve Board amendments to Regulation Z of the Truth In Lending Act (TILA) Section 129 (I)(2), 15 U.S.C. 1639(I)(2) and apply to closed-end mortgage loans. Here is a synopsis of the new rules:

  1. Advertisements cannot claim that the loan has a "fixed" rate or payment if the rate or payment will vary over the life of the loan. The advertisement must disclose with equal prominence all of the rates or payments that will apply over the entire term of the loan and include the APR for the loan.
  2. Advertisements cannot compare an actual or hypothetical rate to the one the consumer will obtain unless the advertisement states the rates or payments will apply over the full term of the loan.
  3. Advertisements cannot characterize products offered as "government loan programs," "government-supported loans," or otherwise endorsed or sponsored by a federal or state government entity if the advertised products are not government supported or sponsored loans.
  4. Advertisements, such as solicitation letters, from companies not associated with the borrower that display the name of the current borrower's mortgage lender must disclose that their advertisement is from a lender not affiliated with the consumer's current lender.
  5. Advertisements cannot make claims of debt elimination if the product advertised would merely replace one debt obligation with another.
  6. Advertisements cannot create a false impression that the mortgage broker or lender is a "counselor" for the consumer.
  7. Foreign-language advertisements which promote "teaser" rates or provide information about trigger terms in a foreign language cannot provide disclosure information about those trigger terms or required disclosures only in English.
Link: New Rules
Posted by Customer Service on December 31st, 2009 9:17 AMPost a Comment (0)
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