Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 52915 

116 CFR Part 610. 

2Section 603(p) of the FCRA defines a 

‘‘nationwide consumer reporting agency’’ as a 

consumer reporting agency that compiles and 

maintains files on consumers on a nationwide basis. 

At this time, there are three nationwide consumer 

reporting agencies – Equifax Inc., Experian, and 

TransUnion LLC. 

3Nationwide specialty consumer reporting 

agencies are defined in section 603(w) of the FCRA. 

Specifically, section 603(w) defines ‘‘nationwide 

specialty consumer reporting agency’’ as a CRA that 

compiles and maintains files on consumers on a 

nationwide basis relating to (1) medical records or 

payments; (2) residential or tenant history, (3) check 

writing history, (4) employment history, or (5) 

insurance claims. 

4Pub. L. 111-24, 123 Stat. 1734 (May 22, 2009). 

secure.commentworks.com/ftcTSRDebtRelief) (and following the 

instructions on the web-based form). To 

ensure that the Commission considers 

an electronic comment, you must file it 

on the web-based form at the weblink 

(https://secure.commentworks.com/ftcTSRDebtRelief). If this Notice appears at 

(http://www.regulations.gov/search/ 

Regs/home.html#home), you may also 

file an electronic comment through that 

website. The Commission will consider 

all comments that regulations.gov 

forwards to it. You may also visit the 

FTC website at (http://www.ftc.gov) to 

read the Notice and the news release 

describing it. 

A comment filed in paper form 

should include the ‘‘Telemarketing 

Sales Rule - Debt Relief Amendments - 

R411001’’ reference both in the text and 

on the envelope, and should be mailed 

or delivered to the following address: 

Federal Trade Commission, Office of the 

Secretary, Room H-135 (Annex T), 600 

Pennsylvania Avenue, NW, Washington, 

DC 20580. The FTC requests that any 

comment filed in paper form be sent by 

courier or overnight service, if possible, 

to avoid security related delays. 

Comments on any proposed filing, 

recordkeeping, or disclosure 

requirements that are subject to 

paperwork burden review under the 

Paperwork Reduction Act should 

additionally be submitted to: Office of 

Information and Regulatory Affairs, 

Office of Management and Budget 

(‘‘OMB’’), Attention: Desk Officer for 

Federal Trade Commission. Comments 

should be submitted via facsimile to 

(202) 395-5167 because U.S. postal mail 

at the OMB is subject to delays due to 

heightened security precautions. 

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. The Commission will 

consider all timely and responsive 

public comments that it receives, 

whether filed in paper or electronic 

form. Comments received will be 

available to the public on the FTC 

website, to the extent practicable, at 

(http://www.ftc.gov/os/ 

publiccomments.shtm). As a matter of 

discretion, the Commission makes every 

effort to remove home contact 

information for individuals from the 

public comments it receives before 

placing those comments on the FTC 

website. More information, including 

routine uses permitted by the Privacy 

Act, may be found in the FTC’s privacy 

policy, at (http://www.ftc.gov/ftc/ 

privacy.shtm). 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. E9–24730 Filed 10–14–09: 8:45 am] 

BILLING CODE 6750–01–S 

FEDERAL TRADE COMMISSION 

16 CFR Part 610 

RIN 3084-AA94 

Free Annual File Disclosures 

Amendments to Rule to Prevent 

Deceptive Marketing of Credit Reports 

and to Ensure Access to Free Annual 

File Disclosures 

AGENCY: Federal Trade Commission. 

ACTION: Notice of proposed rulemaking; 

request for comment. 

SUMMARY: Section 205 of the Credit 

CARD Act of 2009 requires the Federal 

Trade Commission (‘‘FTC’’ or 

‘‘Commission’’) to issue a rule by 

February 22, 2010, to prevent deceptive 

marketing of ‘‘free credit reports.’’To 

that end, the Commission proposes, and 

seeks comment on, amendments to the 

Commission’s Free Annual File 

Disclosures Rule, 16 CFR Part 610. The 

proposed amendments would require 

certain advertisements for ‘‘free credit 

reports’’ to include prominent 

disclosures designed to prevent 

consumers from confusing these ‘‘free’’ 

offers with the federally mandated free 

annual file disclosures available through 

the single centralized source. In 

addition, the Commission proposes 

amendments to delay advertisements for 

products and services through the 

centralized source until after the 

consumer receives his or her free annual 

file disclosure, and to prohibit other 

practices that may interfere with the free 

file disclosure process. Finally, the 

Commission proposes certain technical 

amendments to the Rule. 

DATES: Comments must be received on 

or before November 30, 2009. 

ADDRESSES: Interested parties are 

invited to submit written comments 

electronically or in paper form, by 

following the instructions in the 

Request for Comments part of the 

SUPPLEMENTARY INFORMATION 

section below. Comments in electronic 

form should be submitted by using the 

following weblink: (http:// 

public.commentworks.com/ftc/ 

FreeCreditReportNPRM) (and following 

the instructions on the web-based form). 

Comments in paper form should be 

mailed or delivered to the following 

address: Federal Trade Commission, 

Office of the Secretary, Room H-135 

(Annex T), 600 Pennsylvania Avenue, 

NW, Washington, DC 20580, in the 

manner detailed in the SUPPLEMENTARY

INFORMATION section below. 

FOR FURTHER INFORMATION CONTACT: 

Katherine Armstrong, Attorney, or 

Steven Toporoff, Attorney, Division of 

Privacy and Identity Protection, Bureau 

of Consumer Protection, Federal Trade 

Commission, 600 Pennsylvania Avenue, 

NW., Washington, DC 20580, (202) 326- 

2252. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In this Notice, the Commission is 

proposing to amend its Free Annual File 

Disclosures Rule (‘‘Free Reports Rule’’ 

or ‘‘Rule’’),1 which went into effect in 

2004. This Rule sets out the procedures 

that nationwide consumer reporting 

agencies2 (‘‘CRAs’’) and nationwide 

specialty consumer reporting agencies3

must follow to comply with section 612 

of the Fair Credit Reporting Act 

(‘‘FCRA’’), which gives consumers the 

right to obtain free annual file 

disclosures from the nationwide CRAs 

through a single centralized source. The 

Commission’s proposed amendments 

implement the Credit Card 

Accountability Responsibility and 

Disclosure Act of 2009 (‘‘Act’’),4 which 

directs the Commission to promulgate a 

rule within nine months requiring 

certain disclosures in the advertising for 

‘‘free credit reports’’ to reduce consumer 

confusion. The Commission also is 

proposing a number of changes to 

address certain practices that the 

Commission believes interfere with or 

detract from consumers’ ability to obtain 

their free annual file disclosures, as well 

as certain technical corrections 

described below. 

A. The Free Annual File Disclosures 

Rule 

The Fair and Accurate Credit 

Transactions Act of 2003 (‘‘FACT Act’’) 

amended the FCRA and directed the 

Commission to promulgate a rule 

specifying the procedures for consumers 


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5Prior to the FACT Act, consumers could 

purchase file disclosures from consumer reporting 

agencies, but could only receive a free file 

disclosure under limited circumstances. For 

example, section 615 of the FCRA provides that 

consumers denied credit or employment based 

upon information contained in a consumer report 

may obtain a free file disclosure from the CRA that 

provided the report. 15 U.S.C. 1681m. 

669 FR 35468 (June 24, 2004). The Commission 

staggered implementation of the Rule across the 

country to manage requests for free file disclosures. 

7Most requests for file disclosures through the 

centralized source occur through the 

AnnualCreditReport.com website. 

AnnualCreditReport.com is the only federally 

authorized website for obtaining free annual file 

disclosures. 

816 CFR 610.2(a). 

9‘‘FreeCreditReport.com’’ is owned and operated 

by Consumerinfo.com, Inc., an Experian company. 

10 See discussion of disclosure for Internet 

websites below at II.C.4.d of this document. 

11 FTC v. Consumerinfo.com, Inc., SACV05-801 

AHS (MLGx) (C.D. Cal. Aug. 15, 2005). 

12 Id. The settlement in this action required the 

defendant to pay consumer redress, prohibited the 

defendant from making deceptive and misleading 

claims about ‘‘free’’ reports, and required disclosure 

of the terms and conditions of any ‘‘free’’ offers. The 

defendant also agreed to forgo $950,000 in ill-gotten 

gains. 

13 FTC v. Consumerinfo.com, Inc., SACV05-801 

AHS (MLGx) (C.D. Cal., Jan. 8, 2007) (prohibiting 

defendant from failing to make required disclosures 

mandated by the 2005 Order and requiring 

$300,000 payment for consumer redress). 

14 Pub. L. 111-24, 123 Stat. 1734 (May 22, 2009). 

15 Id. 

to obtain free annual file disclosures 

from nationwide CRAs and nationwide 

specialty consumer reporting agencies.5

To carry out this directive, the 

Commission promulgated the Free 

Reports Rule, which became effective in 

a structured roll-out beginning on the 

west coast in December 2004 and 

ending on the east coast in September 

2005.6 The purpose of the Rule was to 

enable consumers to detect and dispute 

inaccurate or incomplete information in 

the files of nationwide CRAs. 

The Rule requires that the nationwide 

CRAs jointly establish and operate a 

centralized source from which 

consumers can obtain free annual file 

disclosures through a single dedicated 

Internet website 

(AnnualCreditReport.com),7 a toll-free 

telephone number, or a postal address.8

Consumers may request and obtain their 

free annual file disclosures from each 

nationwide CRA at one time or stagger 

their requests throughout the year. 

B. The Advertising of ‘‘Free Credit 

Reports’’ 

Since issuance of the Rule, there has 

been a proliferation of confusing 

advertising regarding where consumers 

can obtain their free annual file 

disclosures. For example, shortly after 

the Rule went into effect, imposter 

websites appeared that misspelled 

AnnualCreditReport.com or used soundalike website names that did not link to 

the authorized AnnualCreditReport.com 

website. 

In addition, the nationwide CRAs and 

others have advertised ‘‘free credit 

reports’’ that are tied to the purchase of 

products and services, such as credit 

scores and credit monitoring. Although 

some advertising predated the Rule, the 

bulk of the advertising for ‘‘free credit 

reports’’ now takes advantage of 

consumers’ general knowledge that free 

file disclosures are available under 

federal law. These advertisements direct 

consumers not to 

AnnualCreditReport.com, the 

authorized source for free annual file 

disclosures, but to commercial websites 

operated by the nationwide CRAs or 

others that sell a variety of products and 

services. Further, when a consumer uses 

an Internet search engine to find the 

website for free annual file disclosures, 

the search engine will usually list 

‘‘sponsored’’ links – again, selling 

products and services – such as 

‘‘FreeCreditReport.com’’ first.9

As a result of this advertising, 

consumers are often misled and 

confused about where to go to obtain the 

free annual file disclosure mandated by 

federal law. Indeed, as discussed further 

below, the Commission has received 

numerous consumer complaints 

demonstrating such confusion, and 

concerns about the issue have been the 

topic of numerous articles and online 

discussions.10

The Commission has taken action to 

address these practices. For example, in 

2005, the Commission sent 29 warning 

letters to operators of more than 130 

‘‘imposter’’ sites. That same year, the 

Commission filed an action against 

Consumerinfo.com, Inc.,11 a marketer of 

‘‘free credit reports.’’ In that action, the 

Commission alleged that 

Consumerinfo.com, which advertised 

‘‘free credit reports’’ to consumers on 

the Internet, through emails, and 

through television and radio 

advertisements, engaged in deceptive 

acts or practices in violation of section 

5 of the FTC Act, including the failure: 

to disclose or to disclose adequately 

in their advertisements or on their 

websites that the ‘‘free’’ credit reports 

they were offering were not associated 

with the annual free credit report 

program pursuant to the FACT Act, 

but rather a commercial promotion, 

and that consumers cannot obtain 

their statutorily-mandated free report 

through Defendant’s websites.12

Two years later, the Commission 

entered a second order with 

Consumerinfo.com settling allegations 

that it violated the 2005 order.13

In addition to law enforcement, the 

Commission has undertaken extensive 

education efforts to alert consumers of 

their legal rights to obtain their free 

annual file disclosures. For example, in 

the past five years, the Commission has 

distributed approximately 1.5 million 

copies of the Commission’s brochure 

Your Access to Free Credit Reports, 

which was published in both English 

and Spanish. In addition, (www.ftc.gov/ 

freereports) contains materials on the 

Free Reports Rule and has garnered 

more than 8.6 million hits. Most 

recently, the Commission distributed 

educational videos through its own 

website and at (www.youtube.com/ 

ftcvideos) to educate consumers about 

AnnualCreditReport.com, the only 

federally recognized source for free 

annual file disclosures. These videos 

have been viewed or downloaded more 

than 400,000 times. 

C. Section 205 of the Act and Proposed 

Section 610.4 of the Free Reports Rule 

Despite the Commission’s efforts, the 

aggressive advertising for ‘‘free credit 

reports’’ tied to the purchase of products 

and services continues to confuse 

consumers. To address consumer 

confusion, Congress enacted section 205 

of the Act (‘‘section 205’’).14 Section 205 

directs the Commission to promulgate a 

rule within nine months that would 

require advertisements for ‘‘free credit 

reports’’ in any medium to include 

certain prominent disclosures. With 

respect to television and radio 

advertisements, section 205 specifies 

the language for the required disclosure 

as: ‘‘This is not the free credit report 

provided for by Federal law.’’For 

television advertisements, this 

disclosure must appear in both the 

audio and visual portion of the 

advertisement. For all other media, 

section 205 directs the Commission to 

issue a rule determining the content and 

placement of the disclosures.15 Finally, 

section 205 requires the following 

interim advertising disclosure if a rule 

is not finalized within nine months: 

‘‘Free credit reports are available under 

Federal law at: 

AnnualCreditReport.com.’’ 

The Commission proposes to add 

section 610.4 to this part to carry out the 

mandate of section 205. This proposal is 

intended to implement the clear 

Congressional directive to combat the 

deceptive marketing of ‘‘free credit 

reports’’ through ‘‘prominent’’ 

disclosures. In enacting section 205, 

Congress was well aware of current 

practices in this area, as well as the 


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16 See, e.g., 155 Cong. Rec. S6178, S6179 (June 

4, 2009) (statement of Sen. Levin) (emphasizing the 

inadequacy of current disclosures accompanying 

offerings for ‘‘free credit reports’’). 1716 CFR Part 308. 

18 Id. Among other things, the Commission 

reasoned that the FACT Act required nationwide 

CRAs to inform consumers of the availability of 

credit scores when providing file disclosures to 

them and that there was a benefit to those 

consumers wishing to purchase a credit score to do 

so at the same time that they obtain their annual 

file disclosures. 69 FR at 35486. 

1916 CFR 610.2(g)(1). 

20Consumer complaints received by the 

Commission show that promotions selling products 

and services confuse and frustrate consumers 

attempting to obtain their free annual file 

disclosures. Indeed, consumers report feeling 

compelled to purchase these advertised products or 

services in order to obtain their free annual file 

disclosure. 

21 The current restriction found in section 

610.2(g)(1) will be renumbered as proposed section 

610.2(g)(2). 

Commission’s efforts to address them in 

the Consumerinfo.com settlements.16 As 

explained more fully below, it is clear 

that Congress sought a marked and 

substantial change from the status quo, 

requiring more significant disclosures 

than any currently required or used in 

advertisements for ‘‘free credit 

reports.’’Accordingly, the Commission 

proposes specific prominent disclosures 

to prevent consumer confusion and 

deceptive marketing of ‘‘free credit 

reports.’’ Such disclosures are designed 

to prevent consumer deception and 

confusion without impeding the truthful 

advertising and marketing of products 

and services that consumers may choose 

to purchase. 

As described in the Section-bySection analysis below, proposed 

section 610.4 includes general 

requirements to ensure that the required 

disclosures are sufficiently prominent, 

such as requiring that all audio 

disclosures be delivered in a slow and 

deliberate manner. This section also 

includes requirements that are specific 

to each of the various media in which 

advertising may occur. For Internetbased advertisements, for example, 

proposed section 610.4 requires that any 

advertisements for ‘‘free credit reports’’ 

appearing on a commercial website 

include a distinct landing page – not 

easily bypassed and containing no 

distracting text – directing consumers to 

AnnualCreditReport.com. 

Where possible, the minimum 

disclosure standards in the proposed 

amended rule are drawn from 

comparable FTC law addressing the 

prominence of specific required 

disclosures – in particular the Trade 

Regulation Rule Pursuant to the 

Telephone Disclosure and Dispute 

Resolution Act of 1992 (‘‘Pay Per Call 

Rule’’).17 They also draw upon relevant 

Commission law enforcement actions 

and business education materials. 

D. Proposed Changes to Section 610.2 

In addition to adding provisions to 

implement section 205, the Commission 

also proposes several changes to section 

610.2 of the Rule to address certain 

practices that the Commission believes 

interfere with or detract from 

consumers’ ability to obtain their free 

annual file disclosures through the 

centralized source. In many respects, 

these proposed changes complement 

section 610.4 in that they would restrict 

practices that may confuse or mislead 

consumers. 

Section 610.2 of the Rule currently 

permits the nationwide CRAs to 

advertise their proprietary products and 

services through the centralized source. 

When it promulgated the Rule, the 

Commission recognized the potential for 

confusion from such advertising and 

marketing, but chose not to restrict it.18

Instead, to address concerns about 

confusion from such advertising, the 

Commission restricted communications 

on the centralized source that ‘‘interfere 

with, detract from, contradict, or 

otherwise undermine the purpose of the 

centralized source.’’19

The Commission does not believe that 

the standard set forth in the Rule has 

worked well. Consumers are subjected 

to substantial amounts of advertising for 

the nationwide CRAs’ proprietary 

products or services while navigating 

AnnualCreditReport.com to obtain their 

free annual file disclosures. Indeed, 

when consumers access the website, 

they encounter offers for a variety of 

add-on goods or services – such as 

credit scores and credit monitoring 

services – which they must purchase or 

decline before obtaining their free 

annual file disclosures.20

To address this concern, the 

Commission proposes to amend section 

610.2(g) to delay any advertising or 

marketing for products or services 

through the centralized source until 

after consumers have obtained their free 

annual file disclosures. To ensure that 

there is no uncertainty as to when 

advertising or marketing may begin, the 

proposed amended Rule specifies that 

advertising or marketing may only begin 

once consumers have obtained their file 

disclosures through telephone, mail, or 

Internet requests. The Commission 

believes that consumers are less likely 

to be confused or deceived if they are 

presented with commercial messages 

after they have obtained their 

disclosures. The Commission notes that 

the proposed delay does not prevent 

truthful advertising or marketing after 

consumers obtain their free file 

disclosures. 

The Commission also proposes the 

addition of a new section 610.2(h) to 

prohibit a number of other practices that 

may interfere with or undermine 

consumers’ ability to obtain their free 

annual file disclosures. This new 

provision: (1) prohibits the placement of 

hyperlinks to the nationwide CRAs’ 

websites that transport consumers away 

from the AnnualCreditReport.com 

website; (2) prohibits the nationwide 

CRAs that participate in the centralized 

source process from requiring 

consumers to establish an account to 

obtain a disclosure; and (3) prohibits the 

nationwide CRAs from imposing any 

‘‘terms and conditions’’ on consumers’ 

access to their file disclosures. As 

above, these restrictions are designed to 

address practices that interfere with a 

consumer’s right to obtain disclosures 

through the centralized source; they do 

not prevent the truthful advertising and 

marketing of products and services 

outside of this context. 

II. Section-by-Section Discussion of 

Proposed Amendments to the Rule 

This section discusses each of the 

proposed amendments to the Rule. The 

Commission seeks comment on each of 

these proposals. 

A. Proposed section 610.2: Operation of 

the centralized source 

Proposed section 610.2 retains the 

current Rule’s general restriction on 

communications or instructions that 

interfere with, detract from, contradict, 

or otherwise undermine the purpose of 

the centralized source.21 In addition, the 

Commission proposes to add a 

restriction on any advertising or 

marketing for products or services, or 

any communications or instructions that 

advertise or market any products or 

services, through the centralized source 

until after the consumer has obtained 

his or her annual file disclosure. As 

discussed above, the Commission 

believes such a restriction is needed to 

address the proliferation of distracting 

and confusing advertising for products 

and services to which consumers are 

exposed on AnnualCreditReport.com, 

and to ensure that consumers easily can 

exercise their federal right to obtain 

their free annual file disclosures. By 

delaying such advertising, consumers 

can focus first on obtaining their free 

annual file disclosure and can decide 

afterwards whether to purchase 

additional products or services. 

The proposed Rule amendments also 

add language to clarify when consumers 


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52918 Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 

22 Cf. Franchise Rule, 16 CFR 436.6(b) (addressing 

disclosures in an online environment). 

23 See FTC Commentary on the Fair Credit 

Reporting Act, 16 CFR 600 Appendix, comment 

610-2 (‘‘A consumer reporting agency may not add 

conditions not set out in the FCRA as a prerequisite 

to the required disclosure.’’). 

24These minimum disclosure standards are 

drawn from several Commission trade regulation 

rules. See Trade Regulation Rule Pursuant to the 

Telephone Disclosure and Dispute Resolution Act 

of 1992 (‘‘Pay Per Call Rule’’), 16 CFR Part 308; 

Door-to-Door Sales Rule, 16 CFR Part 429; 

Franchise Rule, 16 CFR Part 436; Business 

Opportunity Rule, 16 CFR Part 437; and Regulations 

under the Fair Packaging and Labeling Act, 16 CFR 

Part 500. 

have ‘‘obtained’’ an annual file 

disclosure. Specifically, proposed 

section 610.2(g)(1)(i) provides that, for 

telephone and written requests for 

annual file disclosures, the consumer 

‘‘has obtained’’ the file disclosure when 

the file disclosure is mailed to the 

consumer. Similarly, proposed section 

610.2(g)(1)(ii) provides that, for file 

disclosures requested through the 

Internet, the consumer ‘‘has obtained’’ 

the file disclosure when it is delivered 

to the consumer through the Internet. 

The Commission intends this provision 

to mean that the delivery is made in a 

form that permits the consumer to store, 

download, print, or otherwise maintain 

the file disclosure for future reference.22

Proposed section 610.2(g)(2) retains the 

requirement that any advertising on the 

centralized source shall not ‘‘interfere 

with, detract from, contradict, or 

otherwise undermine the purpose of the 

centralized source.’’ 

B. Proposed section 610.2(h): Additional 

prohibited practices 

Proposed section 610.2(h) prohibits 

three additional types of conduct that 

the Commission believes interfere with 

and undermine consumers’ ability to 

obtain their free annual file disclosures 

through the centralized source. 

Specifically, proposed section 610.2(h) 

prohibits: (1) hyperlinks to commercial 

websites from the centralized source; (2) 

any requirement that consumers 

establish an account in order to obtain 

their free annual file disclosures; and (3) 

any requirement that consumers agree to 

‘‘terms and conditions’’ in order to 

obtain their free annual file disclosures. 

Each of these proposed conduct 

prohibitions is discussed below. 

1. Proposed section 610.2(h)(i): 

Prohibition on hyperlinks to 

commercial websites 

Proposed section 610.2(h)(i) prohibits 

hyperlinks to commercial or proprietary 

websites on the website for the 

centralized source. Currently, the 

landing page to 

AnnualCreditReport.com contains 

hyperlinks to the websites of the three 

nationwide CRAs. If a consumer clicks 

on one of the CRA’s hyperlinks, the 

consumer is transported to that CRA’s 

commercial website, where the 

consumer is unable to obtain his or her 

free annual file disclosure provided by 

federal law. The proposed prohibition is 

intended to reduce the possibility that 

consumers attempting to obtain their 

free annual file disclosures will be 

transferred to commercial websites that 

do not provide the federally mandated 

free file disclosures and, indeed, may 

instead be selling various products or 

services. 

2. Proposed section 610.2(h)(ii): 

Prohibition on requiring the 

establishment of accounts 

Proposed section 610.2(h)(ii) prohibits 

requiring a consumer to establish an 

‘‘account’’ as a prerequisite for obtaining 

an annual file disclosure through the 

centralized source. The Commission 

believes that such a practice interferes 

with the operation of the Rule because 

it imposes a condition – namely, the 

requirement that the consumer establish 

an account – on the consumer’s ability 

to obtain free annual file disclosures. 

Such a prerequisite is contrary to the 

intent of the Rule and existing 

Commission commentary on the 

provision of file disclosures.23 Further, 

because establishing an account 

generally requires the collection of 

personally identifiable information, this 

practice runs counter to the prohibition 

in section 610.2(b)(ii), which limits the 

collection of information to that which 

is reasonably necessary to properly 

identify the consumer and to process 

the consumer’s transaction(s). 

3. Proposed section 610.2(h)(iii): 

Prohibition on requiring terms and 

conditions 

Finally, proposed section 610.2(h)(iii) 

prohibits asking or requiring consumers 

to agree to terms and conditions as a 

prerequisite for obtaining their free 

annual file disclosures through the 

centralized source. Apart from 

providing appropriate identifying 

information, a consumer’s right to 

obtain a free annual file disclosure 

should be unfettered and without any 

restrictions or conditions. 

C. Proposed Section 610.4: Prevention of 

deceptive marketing of free credit 

reports 

Proposed section 610.4 implements 

the Act’s prominent disclosure 

requirements for any advertisement for 

‘‘free credit reports.’’As detailed below, 

the proposed rule requirements specify 

the wording and placement of the 

disclosures. 

1. Proposed section 610.4(a): The term 

‘‘free credit report’’ 

As a preliminary matter, proposed 

section 610.4(a) defines the term ‘‘free 

credit report,’’ as used in this section of 

the Rule, as follows: 

a consumer report or file disclosure 

that is prepared by or obtained, 

directly or indirectly, from a 

nationwide consumer reporting 

agency (as defined in section 603(p) of 

the [FCRA]); that is represented, 

either expressly or impliedly, to be 

available to the consumer free of 

charge; and that is, in any way, tied 

to the purchase of a product or 

service. 

The proposed definition has three 

parts. First, because the term ‘‘credit 

report’’ is undefined in section 205 of 

the Act, the FCRA, or the Free Reports 

Rule, the Commission proposes to 

define the term to include a ‘‘consumer 

report’’ or ‘‘file disclosure’’ under the 

FCRA. Second, the term ‘‘free credit 

report’’ includes only those consumer 

reports or file disclosures that are 

represented to be free of charge. Third, 

the term covers only ‘‘free credit report’’ 

offers tied to the purchase of a product 

or service. The qualifier ‘‘tied to the 

purchase of a product or service’’ makes 

clear that providers of truly free 

consumer reports – including the free 

file disclosures provided through the 

centralized source – need not comply 

with the advertising disclosure 

requirements of this section. 

2. Proposed section 610.4(b): The term 

‘‘www.AnnualCreditReport.com and 

877-322-8228’’ 

Proposed section 610.4(b) provides 

that if the centralized source’s website 

(currently 

‘‘(www.AnnualCreditReport.com) ’’) or 

toll-free telephone number (currently 

877-322-8228) were to change, the new 

website or toll-free telephone number 

would be substituted in all disclosures 

required by this proposed section of the 

Rule. 

3. Proposed section 610.4(c): General 

requirements for advertising disclosures 

Proposed section 610.4(c) implements 

the Act’s mandate that the required 

advertising disclosures for ‘‘free credit 

reports’’ be ‘‘prominent’’ by setting forth 

requirements for visual, audio, and 

program-length advertisements.24 These 

proposed presentation requirements are 

designed to ensure that the mandated 


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25 See also 16 CFR 429.1(a) (requiring disclosure 

of right to cancel door-to-door sales ‘‘in the same 

language, e.g., Spanish, as that principally used in 

the oral sales presentation’’). 

26 See, e.g., In re Tender Corp., C-4261 (2009); In 

re Budget Rent-A-Car System, Inc., C-4212 (2008) 

(requiring disclosures to appear in ‘‘print that 

contrasts with the background against which it 

appears’’); see also Federal Trade Commission 

Guidance, Dot Com Disclosures: Information about 

Online Advertising, at 12, available at (http:// 

www.ftc.gov/bcp/edu/pubs/business/ecommerce/ 

bus41.pdf) (‘‘Dot Com Disclosures’’) (‘‘A disclosure 

in a color that contrasts with the background 

emphasizes the text of the disclosure and makes it 

more noticeable. Information in a color that blends 

in with the background of the advertisement is 

likely to be missed.’’) 

27 See, e.g., In re Swisher Int’l, Inc., C-3964 (2000) 

(requiring warnings on cigar advertisements to 

appear ‘‘parallel . . . to the base of the 

advertisement); Regulation under Section 4 of the 

Fair Packaging and Labeling Act, 16 CFR 500.4 

(requiring statement of identity for packaged goods 

to appear ‘‘in lines generally parallel to the base on 

which the packaging or commodity rests as it is 

designed to be displayed’’). 

28 See, e.g., In re Kmart Corp ., C-4197 (2007) 

(requiring audio disclosures to be made ‘‘in a 

volume and cadence sufficient for an ordinary 

consumer to hear and comprehend it’’); In re 

Darden Restaurants, Inc., C-4189 (2007) (same); In 

re Palm, Inc., C-4044 (2002) (same); Dot Com 

Disclosures at 14 (Audio disclosures should be ‘‘in 

a volume and cadence sufficient for a reasonable 

consumer to hear and understand it.’’). 

29 Cf. In re Synchronal Corp., 116 FTC 1189 

(1993) (requiring video or commercial 

advertisements 15 minutes or longer to disclose that 

program is a paid advertisement within the first 30 

seconds and immediately before presentation of 

ordering instructions). 

30 Cf. Franchise Rule, 16 CFR 436.9(a) and 

Business Opportunity Rule, 16 CFR 437.1(a)(21) 

(prohibiting the making of any claim or 

representation, orally or visually, or in writing, that 

contradicts the information required to be disclosed 

by the Rule); Guides for Environmental Marketing 

Claims, 16 CFR 260.6(a) (noting that an absence of 

contrary claims will help make disclosures clear 

and prominent). 

31 See generally Maria Grubbs Hoy and J. Craig 

Andrews, Adherence of Prime-Time Televised 

Advertising Disclosures to the ‘‘Clear and 

Conspicuous’’ Standard: 1990 Versus 2002, 23 J. 

Mktg. Pub. Pol. 170 (2004) (citing numerous studies 

demonstrating that disclosures made in ‘‘dual 

modality’’ – audio and video simultaneously – are 

more effective at communicating information to 

consumers); see also In re Kraft, Inc., 114 F.T.C. 40 

(1991), aff’d, 970 F.2d 311 (7 th Cir. 1992) (in which 

the Commission noted that ‘‘given the distracting 

visual and audio elements and the brief appearance 

of complex superscript in the middle of the 

commercial,’’ it was unlikely that a visual 

disclosure alone would be effective as a corrective 

measure). 

32 See 11 CFR 110.11(c)(3)(iii)(B). 

disclosures can be readily understood 

by consumers. 

a. Proposed section 610.4(c)(1): 

Language usage 

Proposed section 610.4(c)(1) requires 

that any advertising disclosure 

mandated by this section be provided in 

the same language as that principally 

used in the advertisement. This 

proposal draws from identical language 

in section 308.3(a)(1) of the Pay Per Call 

Rule.25 The Commission believes that a 

disclosure in a language different from 

that which is principally used in an 

advertisement would be deceptive. 

b. Proposed section 610.4(c)(2): Visual 

disclosures 

Proposed section 610.4(c)(2) requires 

that a visual disclosure be: (1) of a color 

or shade that readily contrasts with the 

background of the advertisement; (2) in 

a font that is easy to read; and (3) 

parallel to the base of the advertisement. 

These proposed requirements draw from 

comparable provisions in the Pay Per 

Call Rule. Specifically, section 

308.3(a)(2) of the Pay Per Call Rule 

provides that television, video, and 

print advertising disclosures be of a 

color or shade that readily contrasts 

with the background of the 

advertisement. The Commission 

believes that a contrast between the 

disclosure and the background on 

which it appears is fundamental to 

ensure readability.26 In addition, the 

font used for the disclosures should be 

easily readable. For example, if the 

required disclosure were sufficiently 

large, but in an old English text font, the 

disclosure would not be easily readable. 

Finally, section 308.3(3) of the Pay Per 

Call Rule requires that the disclosures in 

print advertisements be parallel with 

the base of the advertisement. The 

Commission has found that visual 

disclosures that are parallel to the base 

of the advertisement are more noticeable 

to consumers.27

c. Proposed section 610.4(c)(3): Audio 

disclosures 

Proposed section 610.4(c)(3) requires 

that audio disclosures for ‘‘free credit 

reports’’ be delivered in a slow and 

deliberate manner and in a reasonably 

understandable volume. This provision 

is identical to section 308.3(a)(4) of the 

Pay Per Call Rule and is necessary to 

ensure that audio disclosures can be 

heard and understood by consumers.28

d. Proposed section 610.4(c)(4): 

Program-length advertisements 

Proposed section 610.4(c)(4) requires 

that any program-length television, 

radio, or Internet-hosted multi-media 

advertisement for ‘‘free credit reports’’ 

provide the required disclosures at the 

beginning, near the middle, and at the 

end of the advertisement. This provision 

is identical to section 308.3(a)(6) of the 

Pay Per Call Rule.29 It is designed to 

enable consumers tuning in to the 

program-length advertisement at 

different stages of the broadcast to 

receive the required disclosure. 

e. Proposed section 610.4(c)(5): 

Inconsistent and contrary information 

Proposed section 610.4(c)(5) prohibits 

anything ‘‘contrary to, inconsistent 

with, or in mitigation of, the required 

disclosure’’ in any advertisement in any 

medium. This section also prohibits any 

audio, visual, or print technique that is 

likely to detract significantly from the 

communication of any required 

disclosure. This provision is identical to 

section 308.3(a)(5) of the Pay Per Call 

Rule,30 and is designed to prevent 

circumvention of the Rule requirements 

through the conveyance of contrary or 

inconsistent information, or other 

actions that undermine the disclosures 

to consumers. 

4. Proposed section 610.4(d): Mediaspecific advertising disclosures 

Proposed section 610.4(d) 

incorporates the statutory requirements 

relating to prominence in specific 

media. The proposed wording and 

presentation of required advertising 

disclosures for each type of media are 

described below. 

a. Proposed section 610.4(d)(1): 

Disclosures for television 

advertisements 

As mandated by section 205 of the 

Act, proposed section 610.4(d)(1) of the 

amended Rule requires that all 

advertisements for ‘‘free credit reports’’ 

broadcast on television include the 

following disclosure: ‘‘This is not the 

free credit report provided for by 

Federal law.’’ 

Proposed section 610.4(d)(1) also 

requires that the disclosure appear 

simultaneously in the audio and visual 

parts of the advertisement, be at least 

four (4) percent of the vertical picture 

height, and appear for a minimum of 

four seconds. This proposal is 

consistent with the Act, which 

specifically requires that all television 

advertising disclosures be provided 

simultaneously in the audio and visual 

parts of the advertisement.31 In 

addition, the proposed requirement that 

the visual disclosure be at least four (4) 

percent of the vertical picture height 

and appear on the screen for four 

seconds is consistent with comparable 

Federal Election Commission 

requirements for the disclosure of the 

funding source of a political 

advertisement on television.32

b. Proposed section 610.4(d)(2): 

Disclosures for radio advertisements 

Proposed section 610.4(d)(2) requires 

that all advertisements for ‘‘free credit 

reports’’ broadcast on radio include the 

following disclosure: ‘‘This is not the 

free credit report provided for by 


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52920 Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 

33 See 155 Cong. Rec. S6178, S6179 (June 4, 2009) 

(statement of Sen. Levin) (‘‘[Section 205] will not 

achieve its purpose unless the mandated disclosure 

is made in a clear, prominent, and effective manner, 

a standard that disclosures in many current 

promotions do not achieve. The cleverly 

deemphasized disclosure currently on 

FreeCreditReport.com, for example, would not be 

sufficient.’’); see also Robert N. Mayer and Tyler 

Barrick, Univ. of Utah, ‘‘Web Sites Offering ‘Free’ 

Credit Reports’’ (Apr. 26, 2007), available at (http:// 

www.consumerwebwatch.org/pdfs/creditsites.pdf) 

(‘‘[C]onsumers using the alternative sites because of 

confusion about annualcreditreport.com and its 

alternatives may end up paying needlessly for 

something they are entitled by law to receive for 

free.’’). 

34Commission precedent establishes that 

disclosures in fine print or buried in dense blocks 

of text are not prominent. The mandate that 

disclosures be ‘‘clear and conspicuous’’ or ‘‘clear 

and prominent’’ dates back more than 60 years. See, 

e.g., Hillman Periodicals v. FTC, 174 F.2d 122 (2d 

Cir. 1949) (upholding Commission order that 

company selling shortened versions of books 

disclose that its publications are abridged ‘‘in 

immediate connection with the title and in clear, 

conspicuous type’’). 

35 See Azure v. Morton, 514 F.2d 897, 900 (9 th 

Cir. 1975) (‘‘As a general rule, the use of a 

disjunctive in a statute indicates alternatives and 

requires that they be treated separately.’’); see also 

Garcia v. United States, 469 U.S. 70, 73 (1984) 

(‘‘Cannons of construction indicate that terms 

connected in the disjunctive . . . be given separate 

meanings.’’); Reiter v. Sonotone Corp., 442 U.S. 330, 

339 (1979); FCC v. Pacifica Foundation, 438 U.S. 

726, 739-740 (1978). See also 155 Cong. Rec. at 

S6179 (statement of Sen. Levin)(‘‘Section 

205(b)(2)(B) . . .is intended to allow the FTC to 

require disclosures on an internet ad, on the 

website to which the ad is linked, on the ‘home’ 

website of the company advertising ‘free’ credit 

reports, or on any combination of the three.’’). 

36Indeed, Congress expressed concern not only 

with deceptive advertising that directs consumers 

to contact commercial websites that are unaffiliated 

with AnnualCreditReport.com, but with the 

inadequate disclaimers and disclosures that are 

buried in fine print or appear in places where most 

consumers will not see them. See 155 Cong. Rec. 

at S6179 (statement of Sen. Levin) (‘‘[B]uried in the 

small print it is revealed that customers that request 

a free credit report must also opt out of a credit 

monitoring service or else they will be charged $15 

a month, indefinitely.’’). 

Federal law.’’This section incorporates 

the Act’s specific required disclosure 

language for radio advertisements. 

c. Proposed section 610.4(d)(3): 

Disclosures for print advertisements 

Proposed section 610.4(d)(3) requires 

that all advertisements for ‘‘free credit 

reports’’ in print include the following 

disclosure: ‘‘This is not the free credit 

report provided for by Federal law. To 

get your free report, visit 

(www.AnnualCreditReport.com) or call 

877-322-8228.’’Proposed section 

610.4(d)(3) further requires that each 

letter of the disclosure be, at a 

minimum, one half the size of the larger 

of the largest letter or numeral used in 

the name of the website or the telephone 

number to which consumers are referred 

to receive what is advertised as a free 

credit report. 

Section 205 of the Act does not 

specify the wording of the advertising 

disclosure required in print 

advertisements; rather, it only requires 

that the disclosure be ‘‘prominent’’ and 

authorizes the Commission to determine 

the appropriate wording of the 

advertising disclosure through this 

rulemaking. The Commission’s proposal 

adopts the wording for the disclosure 

for television and radio advertisements, 

but also adds language directing 

consumers to AnnualCreditReport.com 

or the toll free number where they can 

obtain their free annual file disclosures 

provided by law. The Commission 

believes that this additional language 

will assist consumers in obtaining their 

free annual file disclosures, consistent 

with the purpose of the Act. 

The proposed type size requirement 

in this section – a minimum of one-half 

the size of the larger of the largest letter 

or numeral used in the name of the 

website or the telephone number to 

which consumers are referred to obtain 

their ‘‘free credit report’’ – is identical 

to section 308.3(b)(v)(2)(i) of the Pay Per 

Call Rule. Tying the type size of the 

proposed disclosure to that of the 

website or telephone number promoting 

the ‘‘free credit report’’ ensures that the 

disclosure is ‘‘prominent’’ and increases 

the likelihood that the required 

disclosure will be effectively 

communicated to consumers. 

d. Proposed section 610.4(d)(4): 

Disclosures for Internet websites 

Proposed section 610.4(d)(4) requires 

that any website on which ‘‘free credit 

reports’’ are offered for sale must first 

display on a separate landing page the 

following visual disclosure: ‘‘This is not 

the free credit report provided for by 

Federal law. To get your free report, 

visit (www.AnnualCreditReport.com) or 

call 877-322-8228.’’Proposed section 

610.4(d)(4) also requires that the landing 

page contain no other information aside 

from the statement: ‘‘Go to [hyperlink to 

company’s website.]’’Further, this 

proposed disclosure must: (1) be visible 

to consumers without requiring them to 

scroll down the web page; (2) contain an 

operational hyperlink directing 

consumers to 

(www.AnnualCreditReport.com) that 

appears before the hyperlink to the 

advertised company’s commercial 

website; and (3) be in a type at least 

twice the size as the hyperlink to the 

company’s website or display of the 

company’s Uniform Resource Locator. 

Finally, the proposed Rule provides that 

the landing page must occupy the full 

screen and that no other information, 

graphics, or material may be shown to 

the consumer unless and until the 

consumer has affirmatively selected one 

of the two hyperlinks, described above. 

The Commission believes that this 

proposal implements the clear purpose 

and language of the Act. First, the Act 

specifies that the disclosures be 

‘‘prominent.’’In specifying this 

language, Congress was aware of the 

prolific and confusing advertising with 

respect to ‘‘free credit reports,’’ as well 

as the disclosures currently being used 

to distinguish such offers from the free 

annual file disclosures mandated by 

federal law.33 Thus, its use of the word 

‘‘prominent’’ must be viewed as an 

expression of intent that the new 

disclosures be more noticeable and 

more effective than those currently 

required or used in advertising for ‘‘free 

credit reports.’’To fulfill this statutory 

mandate, the Commission proposes that 

the disclosure be on a separate landing 

page and in a prominent type size with 

little additional text; these format 

requirements are designed to ensure that 

consumers see the disclosure and are 

not distracted by competing messages.34

Second, the Act gives the Commission 

discretion to determine the timing, 

placement, and format of Internet 

disclosures, subject to the overarching 

goal that the disclosures be prominent. 

Specifically, section 205 of the Act 

directs the Commission to promulgate a 

rule ‘‘for advertisements on the Internet 

[that] shall include whether the 

disclosure . . . shall appear on the 

advertisement or the website on which 

the free credit report is made available.’’ 

Consistent with case law construing 

similar uses of the word ‘‘or,’’ as well as 

the Act’s clear purpose, the Commission 

believes that the word ‘‘or’’ indicates 

alternatives and requires that 

alternatives be considered separately, 

thus allowing the Commission 

maximum flexibility to select the most 

effective option.35 In this case, the 

Commission believes that a separate 

disclosure on the website where 

consumers go to obtain advertised ‘‘free 

credit reports’’ is likely to be the most 

effective way to ensure prominence and 

prevent consumer confusion. 

Indeed, the Commission notes that 

some Internet advertising, such as popup screens and banner ads, are sizerestricted. In light of such restrictions, it 

would be difficult to design a disclosure 

in this context that would satisfy the 

statutory ‘‘prominence’’ requirement.36

Further, based on its experience in 

designing disclosures, the Commission 

has found that certain disclosures are 

most effective when given at the 

moment that a consumer is making a 

decision regarding a product or 


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Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 52921 

37 See Dot Com Disclosures at 11 (disclosures are 

more likely to be effective if they are provided 

when the consumer is considering the purchase). 

38 See generally FTC v. TALX Corp., Civ. No. 

4:09-cv-01071 (E.D. Mo. 2009) (requiring ‘‘clear and 

prominent’’ disclosures on the principal website 

screen or landing page where the disclosures are 

most relevant). 

39Michael B. Mazis and Louis A. Morris, Channel, 

in Warnings and Risk Communication, 106 

(Michael S. Wogalter, et al., eds., 1999) (citations 

omitted). 

40 See Dot Com Disclosures (noting that general 

advertising law principles apply regardless of the 

medium used). 

41The confusion and frustration consumers 

experience when trying to exercise their federal 

right to obtain a free annual file disclosure has also 

been the subject of numerous articles and online 

discussions. See, e.g. Robert N. Mayer and Tyler 

Barrick, Univ. of Utah, ‘‘Web Sites Offering ‘Free’ 

Credit Reports’’ (Apr. 26, 2007), available at (http:// 

www.consumerwebwatch.org/pdfs/creditsites.pdf) 

(‘‘Consumers unaware of their right to obtain free 

credit reports from annualcreditreport.com may buy 

expensive services from other sites, believing they 

are getting a credit report for free.’’); Byron 

Acochido and Jon Swartz, ‘‘Free’’ credit reports 

sometimes aren’t free; And it’s not easy to figure out 

which score to use’’ USA Today, Nov. 28, 2007, 

available at (http://www.usatoday.com/money/ 

perfi/credit/2007-11-27-credit-scores_N.htm) 

(‘‘Consumers are also getting tricked into paying for 

basic credit reports before obtaining the ones they 

can get free, as mandated by the federal government 

in 2003.’’). 

42 Cf. Telemarketing Sales Rule, 16 CFR 310.2(bb) 

(defining a telemarketer as ‘‘any person who, in 

connection with telemarketing, initiates or receives 

telephone calls to or from a customer’’); 16 CFR 

310.2(cc) (defining telemarketing as a ‘‘plan, 

program, or campaign which is conducted to induce 

the purchase of goods or services’’). 

4316 CFR 310.3. 

service.37 Here, the proposed disclosure 

would occur at the moment that a 

consumer is seeking to exercise his 

federal right to obtain his free annual 

disclosure online – a critical time to 

prevent deception and the possible 

purchase of unwanted goods and 

services.38

Third, the proposed requirement for 

Internet advertising is consistent with 

the Act’s specific mandates for 

television advertising. As noted above, 

while the Act provides the Commission 

with discretion for many forms of 

advertising, it contains specific 

mandates for television advertising to 

ensure that such advertising be 

sufficiently prominent. Specifically, 

with respect to television, the Act states 

that the disclosures must appear in both 

the audio and visual portions of the 

advertisement. This approach reflects 

the well-established principle of 

marketing communication that dualmodality disclosures ‘‘have been found 

to achieve much higher levels of 

message recall than single-modality 

disclosures.’’39 Similarly, required 

disclosures for Internet advertisements 

should reflect the same clarity, 

prominence, and unavoidability that are 

the hallmarks of the form of disclosure 

Congress mandated for television 

advertisements.40

Overall, the Commission believes that 

requiring a clear and unavoidable 

disclosure is a necessary step in the 

evolution of efforts to combat pervasive 

and confusing marketing of free credit 

reports. As discussed above, the 

Commission has combated such 

confusion through warning letters to 

companies, increased consumer 

outreach, and law enforcement. Despite 

these efforts, a robust industry selling 

‘‘free credit reports’’ tied to the purchase 

of products and services continues 

unabated. Indeed, the Commission 

continues to receive consumer 

complaints demonstrating ongoing 

confusion in the ‘‘free credit report’’ 

marketplace.41 The Commission thus 

proposes a disclosure on the landing 

page to ensure that the disclosure is 

prominent and that consumers view it at 

the most relevant time – when they seek 

to exercise their federal right to obtain 

free annual file disclosures online. As 

noted above, however, nothing in this 

proposal is intended to prevent the 

truthful advertising and marketing of 

products and services that consumers 

may choose to purchase. 

e. Proposed section 610.4(d)(5): 

Disclosures for Internet-hosted multimedia advertising 

Proposed section 610.4(d)(5) requires 

that all Internet-hosted multi-media 

advertisements for ‘‘free credit reports’’ 

disseminated in both audio and visual 

format include the following disclosure: 

‘‘This is not the free credit report 

provided by Federal law. To get your 

free report, visit 

(www.AnnualCreditReport.com) or call 

877-322-8228.’’This section further 

requires that the disclosure appear 

simultaneously in the audio and visual 

part of the advertisement and that the 

visual disclosure be in a type at least the 

same size as the largest hyperlink to the 

company’s website, display of the 

Uniform Resource Locator of the 

company’s website, or display of the 

company’s telephone number appearing 

in the advertisement. 

This proposed section is intended to 

address innovative forms of advertising 

for ‘‘free credit reports’’ in multi-media 

platforms, such as smart phone 

applications, youtube.com, and 

comparable visual and audio 

mechanisms. The Commission believes 

that, as with the disclosure for 

television advertising, the required 

disclosures for Internet-hosted multimedia advertising must appear 

simultaneously in the audio and visual 

part of the advertisement. 

Further, to be prominent, the visual 

disclosure must be in a type at least the 

same size as the largest hyperlink to the 

company’s website, display of the 

company’s web address, or display of 

the company’s telephone number 

appearing in the advertisement. The 

Commission believes that tying the size 

of the disclosure to the size of the 

company’s web address or telephone 

numbers will ensure that the disclosures 

are more readily noticed and 

understood by consumers. 

f. Proposed section 610.4(d)(6): 

Disclosures for telephone requests 

Proposed section 610.4(d)(6) requires 

that when consumers call any telephone 

number appearing in any advertisement 

for free credit reports other than the 

number of the centralized source, 

consumers must first receive the 

following audio disclosure: ‘‘You have 

reached [name of company or service]. 

This is not the source for the free credit 

report provided for by Federal law. To 

get your free credit report, call 877-322- 

8228 or visit 

(www.AnnualCreditReport.com).’’ The 

Commission believes that the Act’s 

broad mandate to require advertising 

disclosure ‘‘for any advertisement for a 

free credit report in any medium’’ 

includes inbound telemarketing.42 To 

prevent confusion, the Commission 

believes that consumers calling 

telephone numbers advertised in the 

marketing of ‘‘free credit reports’’ must 

be informed that they have reached a 

telephone number that is not related to 

the federally-recognized source of free 

reports. Finally, to satisfy the standard 

of prominence, the Commission believes 

that this disclosure should be made at 

the outset of the call. The proposed 

requirements are drawn from the 

Commission’s Telemarketing Sales Rule 

which, among other things, prohibits 

telemarketers from failing to disclose 

that the purpose of the call is to sell 

goods or services and the nature of the 

goods or services.43

g. Proposed section 610.4(d)(7): 

Telemarketing solicitations 

Section 610.4(d)(7) requires that any 

telemarketing call made to a consumer 

that offers a ‘‘free credit report’’ include, 

at the first mention of ‘‘free credit 

report,’’ the following disclosure: ‘‘This 

is not the source for the free credit 

report provided by Federal law. To get 

your free credit report, call 877-322- 

8228 or visit 

(www.AnnualCreditReport.com.) ’’As 

noted above, the Commission believes 

that the Act’s broad mandate to cover 


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52922 Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 

44In addition to the proposed revisions and 

additions discussed above, proposed section 

610.2(b)(2)(iv)(D) removes an erroneous reference to 

‘‘national credit reporting agencies.’’ 

45The comment must be accompanied by an 

explicit request for confidential treatment, 

including the factual and legal basis for the request, 

and must identify the specific portions of the 

comment to be withheld from the public record. 

The request will be granted or denied by the 

Commission’s General Counsel, consistent with 

applicable law and the public interest. See FTC 

Rule 4.9(c), 16 CFR 4.9(c). 

‘‘any advertisement for a free credit 

report in any medium’’ includes 

telemarketing solicitations. 

D. Elimination of Obsolete ‘‘Roll-out’’ 

Provisions of the Current Rule 

Finally, the Commission proposes to 

eliminate from the current Rule the 

‘‘roll-out’’ provisions contained in 

sections 610.2(i) and 610.3(g). When the 

Commission promulgated the current 

Rule, it provided for a structured ‘‘rollout’’ of the availability of free file 

disclosures, beginning in the western 

states on December 1, 2004, and 

concluding with eastern states on 

September 1, 2005. This provision of the 

current Rule is now obsolete and 

retaining it in the amended Rule would 

serve no useful purpose. Accordingly, 

the proposed amended Rule would 

delete sections 610.2(i) and 610.3(g) of 

the current Rule.44

III. Request for Comments 

The Commission invites comment on 

all aspects of the proposed amendments 

to the Free Reports Rule and on the 

specific issues on which comment is 

solicited elsewhere in this document: 

∑ The extent to which the advertising 

or marketing of credit products and 

services through the centralized source 

interferes with or undermines 

consumers’ ability to obtain their free 

annual file disclosures, and whether the 

proposed limitation on advertising 

would address this concern. 

∑ Whether the Commission should 

adopt a ban on all advertising through 

the centralized source, and what the 

benefits and costs of such a ban would 

be. 

∑ Are there effective methods other 

than those proposed by the Commission 

to reduce confusing and deceptive 

advertising regarding ‘‘free credit 

reports’’? How do the costs and benefits 

of these methods compare with those 

proposed by the Commission? 

∑ Whether there are additional 

examples of communications or 

instructions that may ‘‘interfere with, 

detract from, contradict, or otherwise 

undermine the purpose of the 

centralized source’’ that the 

Commission should consider adding to 

the list of examples in proposed section 

610.2(g)(3). 

∑ Whether the proposed definitions of 

‘‘free credit report’’ and 

‘‘(www.AnnualCreditReport.com) and 

877-322-8228’’ are complete and 

accurate, and whether there are 

alternative definitions the Commission 

should consider. 

∑ Whether the Commission’s proposal 

for Internet-hosted multi-media 

advertising is sufficient to ensure that 

the Rule would continue to cover 

advertising for ‘‘free credit reports’’ in 

the evolving technology marketplace. 

∑ When the amendments to the Free 

Reports Rule should go into effect, in 

light of the requirement for interim 

advertising disclosures in section 205 of 

the Act? Are there particular sections of 

the proposed Rule amendments that 

require more time for covered entities to 

comply with the proposed Rule’s 

requirements? 

∑ Ways to minimize any burdens 

imposed by the proposed Rule, while 

also ensuring that consumers have 

unfettered access to their free file 

disclosures. 

Interested parties are invited to 

submit written comments electronically 

or in paper form. Comments should 

refer to ‘‘Free Annual File Disclosures, 

Rule No. R411005’’ to facilitate the 

organization of comments. Please note 

that your comment – including your 

name and your state – will be placed on 

the public record of this proceeding, 

including on the publicly accessible 

FTC website, at (http://www.ftc.gov/os/ 

publiccomments.shtm). 

Because comments will be made 

public, they should not include any 

sensitive personal information, such as 

any individual’s Social Security 

number; date of birth; driver’s license 

number or other state identification 

number, or foreign country equivalent; 

passport number; financial account 

number; or credit or debit card number. 

Comments also should not include any 

sensitive health information, such as 

medical records or other individually 

identifiable health information. In 

addition, comments should not include 

any ‘‘[t]rade secret or any commercial or 

financial information which is obtained 

from any person and which is privileged 

or confidential. . . ,’’ as provided in 

Section 6(f) of the Federal Trade 

Commission Act (‘‘FTC Act’’), 15 U.S.C. 

46(f), and FTC Rule 4.10(a)(2), 16 CFR 

4.10(a)(2). Comments containing 

material for which confidential 

treatment is requested must be filed in 

paper form, must be clearly labeled 

‘‘Confidential,’’ and must comply with 

FTC Rule 4.9(c), 16 CFR 4.9(c).45

Because paper mail addressed to the 

FTC is subject to delay due to 

heightened security screening, please 

consider submitting your comments in 

electronic form. Comments filed in 

electronic form should be submitted by 

using the following weblink: (http:// 

public.commentworks.com/ftc/ 

FreeCreditReportNPRM) (and following 

the instructions on the web-based form). 

To ensure that the Commission 

considers an electronic comment, you 

must file it on the web-based form at the 

weblink (http:// 

public.commentworks.com/ftc/ 

FreeCreditReportNPRM). If this 

document appears at (http:// 

www.regulations.gov/search/Regs/ 

home.html#home), you may also file an 

electronic comment through that 

website. The Commission will consider 

all comments that regulations.gov 

forwards to it. You may also visit the 

FTC Website at (http://www.ftc.gov) to 

read the document and the news release 

describing it. 

A comment filed in paper form 

should include the ‘‘Free Annual File 

Disclosures Rulemaking, Rule No. 

R411005’’ reference both in the text and 

on the envelope, and should be mailed 

or delivered to the following address: 

Federal Trade Commission, Office of the 

Secretary, Room H-135 (Annex T), 600 

Pennsylvania Avenue, NW, Washington, 

DC 20580. The FTC is requesting that 

any comment filed in paper form be sent 

by courier or overnight service, if 

possible, because U.S. postal mail in the 

Washington area and at the Commission 

is subject to delay due to heightened 

security precautions. 

Comments on any proposed filing, 

recordkeeping, or disclosure 

requirements that are subject to 

paperwork burden review under the 

Paperwork Reduction Act should 

additionally be submitted to: Office of 

Information and Regulatory Affairs, 

Office of Management and Budget 

(‘‘OMB’’), Attention: Desk Officer for 

Federal Trade Commission. Comments 

should be submitted via facsimile to 

(202) 395-5167 because U.S. postal mail 

at the OMB is subject to delay due to 

heightened security precautions. 

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. The Commission will 

consider all timely and responsive 

public comments that it receives, 

whether filed in paper or electronic 

form. Comments received will be 

available to the public on the FTC 

website, to the extent practicable, at 

(http://www.ftc.gov/os/ 

publiccomments.shtm). As a matter of 


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46 See 16 CFR 1.26(b)(5). 

475 U.S.C. 601-612. 

485 U.S.C. 603-605. 

49Covered entities under the proposed amended 

Rule will be classified as small businesses if they 

satisfy the Small Business Administration’s relevant 

size standards, as determined by the Small Business 

Size Standards component of the North American 

Industry Classification System (‘‘NAICS’’). The 

closest NAICS size standard relevant to this 

rulemaking is for ‘‘credit bureaus,’’ which is $7 

million maximum in annual receipts. See (http:// 

www.sba.gov/idc/groups/public/documents/ 

sba_homepage/serv_sstd_tablepdf.pdf). 

See also 69 FR 35468, at 35494-495 (June 24, 

2004) (‘‘[T]he Commission is aware of three entities 

that meet the rule definition . . . of a ‘nationwide 

consumer reporting agency.’ The Commission has 

concluded that none of these is a small entity.’’). In 

the original Notice of Proposed Rulemaking for the 

Free Reports Rule, the Commission specifically 

asked several questions related to the existence, 

number and nature of small business entities 

covered by the proposed Free Reports Rule. The 

Commission received no comments responsive to 

those questions. 69 FR at 35495. 

50A Consumer Reports WebWatch study of 24 

websites offering ‘‘free’’ credit reports found that 18 

were owned by or were closely associated with one 

of the three major CRAs – Experian, Equifax, and 

TransUnion. The remaining six sellers of free credit 

reports may be independently operating consumer 

reporting agencies. See Robert N. Mayer and Tyler 

Barrick, Univ. Of Utah, ‘‘Web Sites Offering ‘Free’ 

Credit Reports’’ (Apr. 26, 2007), available at (http:// 

www.consumerwebwatch.org/pdfs/creditsites.pdf) 

(concluding that the marketing of ‘‘free’’ credit 

reports is concentrated in the hands of the three 

major CRAs). 

discretion, the Commission makes every 

effort to remove home contact 

information for individuals from the 

public comments it receives before 

placing those comments on the FTC 

Website. More information, including 

routine uses permitted by the Privacy 

Act may be found in the FTC’s privacy 

policy, at (http://www.ftc.gov/ftc/ 

privacy.shtm). 

IV. Communications by Outside Parties 

to the Commissioners or Their Advisors 

Written communications and 

summaries or transcripts of oral 

communications respecting the merits 

of this proceeding from any outside 

party to any Commissioner or 

Commissioner’s advisor will be placed 

on the public record.46

V. Regulatory Flexibility Act 

The Regulatory Flexibility Act of 1980 

(‘‘RFA’’)47 requires the Commission to 

provide an Initial Regulatory Flexibility 

Analysis (‘‘IRFA’’) with a proposed rule, 

and a Final Regulatory Flexibility 

Analysis (‘‘FRFA’’) with a final rule, 

unless the Commission certifies that the 

rule will have no significant economic 

impact on a substantial number of small 

entities.48

The Commission anticipates that the 

proposed Rule amendments will have 

no significant economic impact on a 

substantial number of small entities. As 

noted above, proposed section 610.2 

will amend the Rule to limit advertising 

through the centralized source and 

prohibit other conduct in connection 

with the provision of annual file 

disclosures to consumers. By its terms, 

amended section 610.2 will apply 

exclusively to the nationwide CRAs that 

currently operate and maintain the 

centralized source pursuant to section 

612(a) of the FCRA, 15 U.S.C. 1681j(a). 

None of the three nationwide CRAs is a 

small entity.49

In addition, proposed section 610.4 

sets forth prohibitions and disclosures 

concerning the advertising or marketing 

of ‘‘free credit reports’’ tied to the 

purchase of other goods or services, 

such as credit scores or credit 

monitoring services, pursuant to section 

205 of the Act. The Commission 

believes that the universe of entities 

offering ‘‘free credit reports’’ is likely to 

be small, comprised mostly of the three 

nationwide CRAs and their subsidiaries 

and affiliates. Further, staff estimates, 

based upon its knowledge of industry 

practices and members, that there may 

also be a small number of 

independently operating credit 

reporting agencies or resellers of 

consumer reports that, in theory, might 

offer ‘‘free credit reports’’ subject to the 

Rule. For example, when the Rule was 

first implemented, several resellers of 

reports appeared, using imposter 

websites, such as those misspelling 

AnnualCreditReport.com, or using 

sound-alike websites names that did not 

link to AnnualCreditReport.com. In 

2005, the Commission staff sent warning 

letters to the known operators of those 

suspect sites, totaling 29 operators. 

While this suggests that the total 

number of independent resellers of 

reports may be small, Commission staff 

does not know the exact number of any 

such independent reporting agencies or 

how many of those independent 

agencies, if any, might be small 

businesses.50 Nonetheless, Commission 

staff believes that the number of small 

entities offering ‘‘free credit reports’’ is 

likely to be insubstantial. The overall 

economic impact of the proposed rule 

amendments set forth at section 610.4 is 

not likely to have a significant impact 

on a substantial number of small 

entities. 

Accordingly, this document serves as 

notice to the Small Business 

Administration of the Commission’s 

certification of no economic impact. 

Nonetheless, the Commission has 

determined to prepare the following 

analysis: 

A. Description of the Reasons That 

Action by the Agency Is Being 

Considered 

The Commission proposes, and seeks 

comment on, amendments to the Free 

Reports Rule to implement section 205 

of the Act, which mandates that 

advertisements offering ‘‘free credit 

reports’’ contain prominent prescribed 

disclosures informing consumers that 

federally mandated free file disclosures 

are available at 

AnnualCreditReport.com. Further, the 

Free Reports Rule requires, among other 

things, a centralized source through 

which consumers may request a free 

annual file disclosure from each 

nationwide CRA. Through this Notice, 

the Commission proposes, and seeks 

comment on, amendments to the Rule 

that would eliminate practices that 

interfere with consumers’ ability to 

obtain free annual file disclosures 

through the centralized source, in 

violation of section 610.2(g) of the 

current Rule. 

B. Statement of the Objectives of, and 

Legal Basis for, the Proposed Rule 

Amendments 

The proposed amendments to the Free 

Reports Rule implement section 205 of 

the Act, which directs the Commission 

to prevent deceptive advertising of ‘‘free 

credit reports.’’In addition, the 

Commission seeks to eliminate practices 

that interfere with consumers’ ability to 

obtain file disclosures through the 

centralized source, in violation of 

section 610.2(g) of the current Rule. 

C. Small Entities to Which the Proposed 

Rule Amendments Will Apply 

As noted above, the proposed Rule 

amendments set forth in section 610.2 

will apply to the nationwide CRAs that 

are required to provide free annual file 

disclosures through the centralized 

source pursuant to section 612(a) of the 

FCRA, 15 U.S.C. 1681j(a). The 

Commission has not identified any 

nationwide CRA that is a small entity. 

The proposed amendments to the Rule 

set forth in proposed section 610.4 

pertaining to the advertising of free 

credit reports pursuant to section 205 of 

the Act will apply to the nationwide 

CRAs and their subsidiaries, as well as 

independent resellers of annual file 

disclosures. Commission staff believes, 

based upon its knowledge of the 

industry and its members, that few, if 

any, of these entities are likely to be 

small. Nonetheless, the Commission 

specifically requests additional 

comment on the number of entities 

likely to be affected by the proposed 

section 610.4 to the Rule and the 


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51 See 5 CFR 1320.3(c)(2) (excluding from the 

definition of ‘‘collection of information’’ the 

‘‘public disclosure of information originally 

supplied by the Federal government to the recipient 

for the purpose of disclosure to the public’’). 

number of those, if any, that are small 

entities. 

D. Projected Reporting, Recordkeeping, 

and Other Compliance Requirements 

The amendments proposed in section 

610.4 would set forth statutorilymandated advertising disclosures for 

offering of ‘‘free credit reports’’ in 

television and radio advertisements, as 

well as other media, including print and 

Internet advertising. These proposed 

amendments to the Rule impose no 

reporting or recordkeeping obligations. 

The amendments proposed in section 

610.2 would limit advertising on the 

centralized source until after consumers 

have obtained their free annual file 

disclosures, as well as prohibit practices 

that interfere with consumers’ ability to 

obtain free annual file disclosures 

through the centralized source. As 

discussed more fully below in 

connection with the Paperwork 

Reduction Act, Commission staff 

estimates that these proposed 

amendments to the Rule will impose no 

more than a de minimis, one-time 

burden of 12 hours to be completed by 

professional technical personnel and/or 

management personnel. 

E. Duplicative, Overlapping, or 

Conflicting Federal Rules 

The Commission has not identified 

any other federal statutes, rules, or 

policies that would duplicate, overlap, 

or conflict with the proposed rule 

amendments. The Commission invites 

comment on this issue. 

F. Significant Alternatives to the 

Proposed Rule Amendments 

As previously noted, the proposed 

amendments to the Rule will affect only 

nationwide CRAs and their subsidiaries, 

as well as independent resellers of 

credit reports. The Commission is 

unaware of any nationwide CRAs or 

independent resellers of credit reports 

that are small entities and therefore it 

does not include any special 

exemptions, delayed compliance dates, 

or other regulatory alternatives 

specifically to reduce burdens on such 

entities. Nonetheless, the Commission 

seeks additional comment regarding: (1) 

the existence of small entities for which 

the proposed rule amendments would 

have a significant economic impact; and 

(2) suggested alternatives that would 

reduce the economic impact of the 

proposed rule amendments on such 

small entities. If the comments filed in 

response to this document identify any 

small entities that would be 

significantly affected by the proposed 

rule amendments, as well as alternatives 

that would reduce compliance costs on 

such entities, the Commission will 

consider the feasibility of such 

alternatives and determine whether they 

should be incorporated into any 

amended final rule. 

VI. Paperwork Reduction Act 

The Commission is submitting this 

proposed amended Rule and a 

Supporting Statement for Information 

Collection Provisions to the Office of 

Management and Budget (‘‘OMB’’) for 

review under the Paperwork Reduction 

Act (‘‘PRA’’), 44 U.S.C. 3501-3521. In 

this Notice, the Commission proposes to 

amend the Free Reports Rule to 

implement section 205 of the Act 

Specifically, the amendments would 

require any entity engaged in the 

marketing of ‘‘free credit reports’’ to 

include in its advertisements prescribed 

disclosures appropriate for the medium 

in which the advertisements appear. In 

addition, the Commission proposes to 

amend the Rule to eliminate 

unnecessary interference with 

consumers’ ability to obtain their annual 

file disclosures from the centralized 

source. 

The Commission invites comments 

that will enable it to: (1) evaluate 

whether the proposed collections of 

information are necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information will serve a useful purpose; 

(2) evaluate the accuracy of the 

Commission’s estimate of the burden of 

the proposed collection of information, 

including the validity of the 

methodology and assumptions used; (3) 

enhance the quality, utility, and clarity 

of the information to be collected; and 

(4) minimize the burden of the 

collections of information on those who 

must comply, including through the use 

of appropriate automated, electronic, 

mechanical, or other technological 

techniques, or other forms of 

information technology. 

A. Current Rule and Associated PRA 

Burden 

The current Rule requires nationwide 

CRAs and nationwide specialty CRAs to 

disclose information to third parties by 

requiring those consumer reporting 

agencies to provide to consumers, upon 

request, one free annual file disclosure. 

It also requires the nationwide CRAs to 

provide consumers with the ability to 

request this disclosure through a 

centralized Internet website, a toll-free 

telephone number, and a postal address. 

In addition, the current Rule requires 

the nationwide CRAs to establish a 

standardized form for Internet and mail 

requests, and it provides a model 

standardized form that may be used to 

comply with that requirement. 

B. Proposed Section 610.4 

Proposed section 610.4 would require 

all advertisements for ‘‘free credit 

reports’’ to contain certain prescribed 

disclosures tailored to the medium 

used. As such, these disclosures do not 

constitute a ‘‘collection of information,’’ 

as defined by OMB’s regulations that 

implement the PRA.51 Accordingly, 

implementation of section 205 of the 

Act presents no associated PRA 

collection of information burden. 

C. Proposed Amended Section 610.2 

The proposed amendments to section 

610.2 of the Rule are designed to 

prevent interference with consumers’ 

ability to obtain their free annual file 

disclosures through the centralized 

source, as permitted by law. The 

proposed amendments will not modify 

the nationwide CRAs’ current obligation 

to provide consumers with free annual 

file disclosures upon request. Nor are 

the proposed amendments to section 

610.2 likely to increase or decrease the 

estimated number of annual file 

disclosures made available to 

consumers, whether through the 

Internet, telephone, or mail. Rather, the 

amendments are intended to make it 

easier for consumers to obtain their free 

annual file disclosures from the 

centralized source without distracting 

advertising, including advertising 

leading consumers to commercial 

websites. 

Moreover, the proposed amendments 

to section 610.2 are unlikely to increase 

significantly the administrative burden 

on the nationwide CRAs providing 

consumers with annual file disclosures 

through the centralized source. As 

discussed above, the proposed 

amendments to section 610.2 would 

require the nationwide CRAs to remove 

links on the centralized source to their 

commercial or proprietary websites. 

Finally, if a nationwide CRA chooses to 

advertise products and services – such 

as credit scores or credit monitoring – 

through the centralized source, it can do 

so only after the consumer has obtained 

his or her free annual file disclosure. 

Accordingly, in order to advertise 

through the centralized source, the 

nationwide CRAs must establish a 

mechanism to verify that consumers 

have completed their transaction. 


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52This figure derives from consultation with FTC 

staff experienced in web design and operations. 

53This estimate is based on mean hourly wages 

found at (http://www.bls.gov/ncs/ 

ncswage2008.htm#Wage_Tables) (National 

Compensation Survey: Occupational Earnings in 

the United States 2008, US Department of Labor 

released August 2009, Bulletin 2720, Table 3) for 

the various managerial and technical staff support 

exemplified above. 

1. Estimated Hours Burden and 

Associated Labor Cost 

Commission staff believes that the 

above-noted proposed administrative 

amendments to section 610.2 will 

impose no more than a de minimis, onetime burden, as the three nationwide 

CRAs reconfigure the centralized source 

and their own proprietary websites. 

Commission staff estimates that these 

steps will take approximately 12 hours 

to complete per CRA.52

Commission staff estimates labor costs 

by applying appropriate estimated 

hourly cost figures to the burden hours 

(12) described above. It is difficult to 

calculate with precision the labor costs 

association with the proposed Rule 

amendments, because they entail 

varying compensation levels of 

management (e.g., administrative 

services, computer and information 

systems, systems analysts, and network 

and computer system administrators). 

FTC staff assumes that professional 

technical personnel and/or management 

personnel will implement the 

amendments, at an hourly rate of 

$39.42.53

Based upon the above estimates and 

assumptions, the total labor cost for 

each of the three nationwide CRAs to 

comply with the proposed amendments 

to the Rule is $473.00 (12 hours × 

$39.42) or, cumulatively, $1,419. 

2. Estimated Capital/Other Non-Labor 

Cost Burden 

Commission staff believes that the 

proposed Rule amendments will not 

impose any capital or other non-labor 

costs. Commission staff assumes that the 

nationwide CRAs will continue their 

current practice of using third-party 

contractors (instead of their own 

employees) to fulfill consumer requests 

for annual file disclosures, pursuant to 

the Rule. Because of the way these 

contracts are typically established, these 

costs will likely be incurred on a 

continuing basis, and will be calculated 

based on the number of annual file 

disclosures requested by consumers. As 

discussed above, Commission staff 

believes that the proposed amendments, 

while making it easier for consumers to 

obtain their free annual file disclosures 

from the centralized source, will not 

increase the burden on industry to 

supply such file disclosures, nor affect 

the overall number of file disclosures 

provided to consumers annually, 

because consumers will likely be 

redirected from websites that require 

consumers to pay for their ‘‘free credit 

report’’ to the centralized source. 

Proposed Rule 

List of Subjects in 16 CFR Part 610 

Fair Credit Reporting Act, Consumer 

reports, Consumer reporting agencies, 

Credit, Trade practices. 

Authority and Issuance 

For the reasons discussed in the 

preamble, the Federal Trade 

Commission proposes to amend title 16, 

Chapter I, Subchapter F, of the Code of 

Federal Regulations, part 610, as 

follows: 

1. The authority citation for part 610 

is revised to read as follows: 

Authority: 15 U.S.C. 1681a, g, and h; sec. 

211(a) and (d), Pub. L. 108-159, 117 Stat. 

1968 and 1972 (15 U.S.C. 1681j). Pub. L. 111- 

24. 

2. Revise § 610.2 to read as follows: 

§ 610.2 Centralized source for requesting 

annual file disclosures from nationwide 

consumer reporting agencies. 

(a) Purpose. The purpose of the 

centralized source is to enable 

consumers to make a single request to 

obtain annual file disclosures from all 

nationwide consumer reporting 

agencies, as required under section 

612(a) of the Fair Credit Reporting Act, 

15 U.S.C. 1681j(a). 

(b) Establishment and operation. All 

nationwide consumer reporting agencies 

shall jointly design, fund, implement, 

maintain, and operate a centralized 

source for the purpose described in 

paragraph (a) of this section. The 

centralized source required by this part 

shall: 

(1) Enable consumers to request 

annual file disclosures by any of the 

following request methods, at the 

consumers’ option: 

(i) A single, dedicated Internet 

website, 

(ii) A single, dedicated toll-free 

telephone number; and 

(iii) Mail directed to a single address; 

(2) Be designed, funded, 

implemented, maintained, and operated 

in a manner that: 

(i) Has adequate capacity to accept 

requests from the reasonably anticipated 

volume of consumers contacting the 

centralized source through each request 

method, as determined in accordance 

with paragraph (c) of this section; 

(ii) Collects only as much personally 

identifiable information as is reasonably 

necessary to properly identify the 

consumer as required under the Fair 

Credit Reporting Act, section 610(a)(1), 

15 U.S.C. 1681h(a)(1), and other 

applicable laws and regulations, and to 

process the transaction(s) requested by 

the consumer; 

(iii) Provides information through the 

centralized source website and 

telephone number regarding how to 

make a request by all request methods 

required under § 610.2(b)(1) of this part; 

and 

(iv) Provides clear and easily 

understandable information and 

instructions to consumers, including, 

but not necessarily limited to: 

(A) Providing information on the 

progress of the consumer’s request 

while the consumer is engaged in the 

process of requesting a file disclosure; 

(B) For a website request method, 

providing access to a ‘‘help’’ or 

‘‘frequently asked questions’’ screen, 

which includes specific information 

that consumers might reasonably need 

to request file disclosures, the answers 

to questions that consumers might 

reasonably ask, and instructions 

whereby a consumer may file a 

complaint with the centralized source 

and with the Federal Trade 

Commission; 

(C) In the event that a consumer 

requesting a file disclosure through the 

centralized source cannot be properly 

identified in accordance with the Fair 

Credit Reporting Act, section 610(a)(1), 

15 U.S.C. 1681h(a)(1), and other 

applicable laws and regulations, 

providing a statement that the 

consumers’ identity cannot be verified; 

and directions on how to complete the 

request, including what additional 

information or documentation will be 

required to complete the request, and 

how to submit such information; and 

(D) A statement indicating that the 

consumer has reached the website or 

telephone number for ordering free 

annual credit reports as required by 

federal law; and 

(3) Make available to consumers a 

standardized form established jointly by 

the nationwide consumer reporting 

agencies, which consumers may use to 

make a request for an annual file 

disclosure, either by mail or on the 

Internet website required under 

§ 610.2(b)(1) of this part, from the 

centralized source required by this part. 

The form provided at 16 CFR Part 698, 

Appendix D, may be used to comply 

with this section. 

(c) Requirement to anticipate. The 

nationwide consumer reporting agencies 

shall implement reasonable procedures 

to anticipate, and to respond to, the 

volume of consumers who will contact 


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the centralized source through each 

request method, to request, or attempt to 

request, a file disclosure, including 

developing and implementing 

contingency plans to address 

circumstances that are reasonably likely 

to occur and that may materially and 

adversely impact the operation of the 

nationwide consumer reporting agency, 

a centralized source request method, or 

the centralized source. 

(1) The contingency plans required by 

this section shall include reasonable 

measures to minimize the impact of 

such circumstances on the operation of 

the centralized source and on 

consumers contacting, or attempting to 

contact, the centralized source. 

(i) Such reasonable measures to 

minimize impact shall include, but are 

not necessarily limited to: 

(A) The extent reasonably practicable 

under the circumstances, providing 

information to consumers on how to use 

another available request method; 

(B) The extent reasonably practicable 

under the circumstances, 

communicating, to a consumer who 

attempts but is unable to make a 

request, the fact that a condition exists 

that has precluded the centralized 

source from accepting all requests, and 

the period of time after which the 

centralized source is reasonably 

anticipated to be able to accept the 

consumers’ request for an annual file 

disclosure; and 

(C) Taking all reasonable steps to 

restore the centralized source to normal 

operating status as quickly as reasonably 

practicable under the circumstances. 

(ii) Reasonable measures to minimize 

impact may also include, as appropriate, 

collecting request information but 

declining to accept the request for 

processing until a reasonable later time, 

provided that the consumer is clearly 

and prominently informed, to the extent 

reasonably practicable under the 

circumstances, of when the request will 

be accepted for processing. 

(2) A nationwide consumer reporting 

agency shall not be deemed in violation 

of § 610.2(b)(2)(i) of this part if a 

centralized source request method is 

unavailable to accept requests for a 

reasonable period of time for purposes 

of conducting maintenance on the 

request method, provided that the other 

required request methods remain 

available during such time. 

(d) Disclosures required. If a 

nationwide consumer reporting agency 

has the ability to provide a consumer 

report to a third party relating to a 

consumer, regardless of whether the 

consumer report is owned by that 

nationwide consumer reporting agency 

or by an associated consumer reporting 

agency, that nationwide consumer 

reporting agency shall, upon proper 

identification in compliance with 

section 610(a)(1) of the Fair Credit 

Reporting Act, 15 U.S.C. 1681h(a)(1), 

provide an annual file disclosure to 

such consumer if the consumer makes a 

request through the centralized source. 

(e) High request volume and 

extraordinary request volume – (1) High 

request volume. Provided that a 

nationwide consumer reporting agency 

has implemented reasonable procedures 

developed in accordance with 

paragraph (c) of this section, entitled 

‘‘requirement to anticipate,’’ the 

nationwide consumer reporting agency 

shall not be deemed in violation of 

paragraph (b)(2)(i) of this section for any 

period of time in which a centralized 

source request method, the centralized 

source, or the nationwide consumer 

reporting agency experiences high 

request volume, if the nationwide 

consumer reporting agency: 

(i) Collects all consumer request 

information and delays accepting the 

request for processing until a reasonable 

later time; and 

(ii) Clearly and prominently informs 

the consumer of when the request will 

be accepted for processing. 

(2) Extraordinary request volume. 

Provided that the nationwide consumer 

reporting agency has implemented 

reasonable procedures developed in 

compliance with paragraph (c) of this 

section, entitled ‘‘requirement to 

anticipate,’’ the nationwide consumer 

reporting agency shall not be deemed in 

violation of paragraph (b)(2)(i) of this 

section for any period of time during 

which a particular centralized source 

request method, the centralized source, 

or the nationwide consumer reporting 

agency experiences extraordinary 

request volume. 

(f) Information use and disclosure. 

Any personally identifiable information 

collected from consumers as a result of 

a request for annual file disclosure, or 

other disclosure required by the Fair 

Credit Reporting Act, made through the 

centralized source, may be used or 

disclosed by the centralized source or a 

nationwide consumer reporting agency 

only: 

(1) To provide the annual file 

disclosure or other disclosure required 

under the FCRA requested by the 

consumer; 

(2) To process a transaction requested 

by the consumer at the same time as a 

request for annual file disclosure or 

other disclosure; 

(3) To comply with applicable legal 

requirements, including those imposed 

by the Fair Credit Reporting Act and 

this part; and 

(4) To update personally identifiable 

information already maintained by the 

nationwide consumer reporting agency 

for the purpose of providing consumer 

reports, provided that the nationwide 

consumer reporting agency uses and 

discloses the updated personally 

identifiable information subject to the 

same restrictions that would apply, 

under any applicable provision of law 

or regulation, to the information 

updated or replaced. 

(g) Communications provided through 

centralized source. 

(1) Any advertising or marketing for 

products or services, or any 

communications or instructions that 

advertise or market any products or 

services, through the centralized source 

must be delayed until after the 

consumer has obtained his or her 

annual file disclosure. 

(i) In the case of requests made by 

mail or telephone, the consumer ‘‘has 

obtained his or her annual file 

disclosure’’ when the file disclosure is 

mailed, and a nationwide consumer 

reporting agency may include 

advertising for other products or 

services with the file disclosure. 

(ii) In the case of requests made 

through the centralized source Internet 

website, the consumer ‘‘has obtained his 

or her annual file disclosure’’ when the 

file disclosure is delivered to the 

consumer through the Internet, and the 

nationwide consumer reporting agency 

that provided the disclosure may then 

advertise other products or services. 

(2) Any communications, 

instructions, or permitted advertising or 

marketing shall not interfere with, 

detract from, contradict, or otherwise 

undermine the purpose of the 

centralized source stated in paragraph 

(a) of this section. 

(3) Examples of interfering, detracting, 

inconsistent, and/or undermining 

communications include: 

(i) Centralized source materials that 

represent, expressly or by implication, 

that a consumer must purchase a paid 

product or service in order to receive or 

to understand the annual file disclosure; 

(ii) Centralized source materials that 

represent, expressly or by implication, 

that annual file disclosures are not free, 

or that obtaining an annual file 

disclosure will have a negative impact 

on the consumers’ credit standing; and 

(iii) Centralized source materials that 

falsely represent, expressly or by 

implication, that a product or service 

offered ancillary to receipt of a file 

disclosure, such as a credit score or 

credit monitoring service, is free, or fail 

to clearly and prominently disclose that 

consumers must cancel a service, 

advertised as free for an initial period of 


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Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 52927 

time, to avoid being charged, if such is 

the case. 

(h) Other practices prohibited through 

the centralized source. The centralized 

source shall not: 

(1) Contain hyperlinks to commercial 

or proprietary websites on the website 

for the centralized source. 

(2) Ask or require consumers to set up 

an account as a prerequisite for 

obtaining an annual file disclosure; or 

(3) Ask or require consumers to agree 

to terms and conditions as a prerequisite 

for obtaining an annual file disclosure. 

3. In § 610.3, remove paragraph (g). 

4. Add § 610.4 to read as follows: 

§ 610.4 Prevention of deceptive marketing 

of free credit reports 

(a) Free credit report. For purposes of 

this section, ‘‘free credit report’’ means 

a consumer report or file disclosure that 

is prepared by or obtained, directly or 

indirectly, from a nationwide consumer 

reporting agency (as defined in section 

603(p) of the Fair Credit Reporting Act); 

that is represented, either expressly or 

impliedly, to be available to the 

consumer free of charge; and that is, in 

any way, tied to the purchase of a 

product or service. 

(b) www.AnnualCreditReport.com and 

877-322-8228. The disclosures 

mandated by this section use the 

Uniform Resource Locator address 

‘‘www.AnnualCreditReport.com’’ and 

toll-free telephone number, 877-322- 

8228. These are the locator address and 

toll-free telephone number currently 

used by the centralized source. If the 

locator address or toll-free telephone 

number changes in the future, the new 

address or telephone number shall be 

substituted. 

(c) General requirements for 

advertising disclosures. The disclosures 

covered by paragraph (d) of this section 

shall comply with the following 

requirements: 

(1) All disclosures shall be made in 

the same language as that principally 

used in the advertisement; 

(2) Visual disclosures shall be of a 

color or shade that readily contrasts 

with the background of the 

advertisement, in a font easily read by 

a reasonable consumer, and be parallel 

to the base of the advertisement; 

(3) Audio disclosures shall be 

delivered in a slow and deliberate 

manner and in a reasonably 

understandable volume; 

(4) Program-length television, radio, 

or Internet-hosted multi-media 

advertisement disclosures shall be made 

at the beginning, near the middle, and 

at the end of the advertisement; and 

(5) Nothing contrary to, inconsistent 

with, or in mitigation of, the required 

disclosures shall be used in any 

advertisement in any medium; nor shall 

any audio, visual, or print technique be 

used that is likely to detract 

significantly from the communication of 

any disclosure. 

(d) Medium-specific advertising 

disclosures. All advertisements that 

include offers of free credit reports shall 

include the disclosures required by this 

section. 

(1) Television advertisements. All 

advertisements for free credit reports 

broadcast on television shall include the 

following disclosure: ‘‘This is not the 

free credit report provided for by 

Federal law.’’ The disclosure shall 

appear simultaneously in the audio and 

visual part of the advertisement. The 

visual disclosure shall be at least 4 

percent of the vertical picture height, 

and appear for a minimum of four 

seconds. 

(2) Radio advertisements. All 

advertisements for free credit reports 

broadcast on radio shall include the 

following disclosure: ‘‘This is not the 

free credit report provided for by 

Federal law.’’ 

(3) Print advertisements. All print 

advertisements for free credit reports 

shall include the following disclosure: 

‘‘This is not the free credit report 

provided for by Federal law. To get your 

free report, visit 

www.AnnualCreditReport.com or call 

877-322-8228.’’ Each letter of the 

disclosure shall be, at minimum, onehalf the size of the largest letter or 

numeral used in the name of the website 

or the telephone number to which 

consumers are referred to receive what 

is advertised as a free credit report. 

(4) Internet websites. 

(i) Any website offering free credit 

reports must first display a separate 

landing page to consumers before the 

consumer may obtain the report from 

that website. 

(ii) The landing page must display the 

following visual disclosure: ‘‘This is not 

the free credit report provided for by 

Federal law. To get your free report, 

visit www.AnnualCreditReport.com or 

call 877-322-8228.’’ The landing page 

may contain no other information aside 

from the statement: ‘‘Go to [hyperlink to 

company’s website.]’’ The required 

disclosure must: 

(A) Be visible to consumers without 

requiring them to scroll down the 

webpage; 

(B) Include an operational hyperlink 

that will direct consumers exclusively 

to www.AnnualCreditReport.com that 

appears before the hyperlink to the 

company’s website; and 

(C) Appear in type at least twice the 

size as any hyperlink to the company’s 

website or display of the Uniform 

Resource Locator of the company’s 

website. 

(iii) The landing page must occupy 

the full screen and no other information, 

graphics, or material may be shown to 

the consumer unless and until the 

consumer has affirmatively selected one 

of the two hyperlinks described in 

paragraph (d)(4)(ii) of this section. 

(5) Internet-hosted multi-media 

advertising. All advertisements for free 

credit reports disseminated through 

Internet-hosted multi-media in both 

audio and visual format shall include 

the following disclosure: ‘‘This is not 

the free credit report provided for by 

Federal law. To get your free report, 

visit www.AnnualCreditReport.com or 

call 877-322-8228.’’ The disclosure shall 

appear simultaneously in the audio and 

visual part of the advertisement. The 

visual disclosure shall be in type at least 

the same size as the largest hyperlink to 

the company’s website, the Uniform 

Resource Locator of the company’s 

website, or the company’s telephone 

number appearing in the advertisement. 

(6) Telephone requests. When 

consumers call any telephone number, 

other than the number of the centralized 

source, appearing in an advertisement 

that represents free credit reports are 

available at the number, consumers 

must first receive the following audio 

disclosure: ‘‘You have reached [name of 

company or service]. This is not the 

source for the free credit report 

provided for by Federal law. To get your 

free credit report, call 877-322-8228 or 

visit www.AnnualCreditReport.com.’’ 

(7) Telemarketing solicitations. When 

telemarketing sales calls are made that 

include offers of free credit reports, the 

call must include at the first mention of 

a credit report thefollowing disclosure: 

‘‘This is not the source for the free credit 

report provided by Federal law. To get 

your free credit report, call 877-322- 

8228 or visit 

www.AnnualCreditReport.com.’’ 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. E9–24729 Filed 10–14–09: 10:06 

am] 

BILLING CODE 6750–01–S 


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