WARNING: WHEN THE SERVICE IS FREE -- YOU ARE MOST LIKELY THE PRODUCT!
In light of the Target credit card security breach and the normal spending of the holiday season, many consumers may wish to check their credit reports. Not so coincidently when various companies are offering consumers “FREE” credit reports …
Free?
Interesting … a commercial for a free credit report that did not come from one of the three national credit repositories, Experian, TransUnion, or Equifax. So how can they make money giving away free credit reports that cost them money?
There is an old saying in poker, “if you look around the table and can’t figure out who is the patsy, it is you.” Likewise, in data processing, if you cannot figure out how a company makes money giving away its products and services, the most likely explanation is that you are the product being sold.
Yes it is free … but as they say, terms and conditions apply!
Let’s take a closer look …
While there is nothing wrong in receiving free goods and services in return for your personal non-public information, you should be aware of the conditions under which this information is collected, stored, and used. Or like the Better Business Bureau suggests, “Investigate BEFORE You Invest.”
The easy way to begin your investigation is to read the “privacy policy” and “terms of use” that are usually found on the very bottom of most web pages. Although they are written in English, they are also written in lawyerese – a curious mixture of legal writing that appears to be understandable by the average consumer. And yet, even lawyers have some trouble reading these disclosures.
Here are excerpts from the company’s disclosures (use the source link to see the entire disclosure in context – emphasis added by the author) …
Privacy Policy
Effective date January 23, 2013
Welcome to Credit Karma! Credit Karma takes your privacy seriously. This policy covers how Credit Karma treats personal information that Credit Karma collects and receives.
Please note however that this policy does not cover how Credit Karma treats credit report information on you that Credit Karma obtains when you register to receive our services. How Credit Karma treats your credit report information is discussed in our Terms of Use. This policy covers all other information about you that we collect and receive. <Source:Credit Karma Privacy Policy | Credit Karma>
Terms of Use
Updated January 23, 2013
Acceptance of Terms
WELCOME TO CREDIT KARMA!
PLEASE CAREFULLY REVIEW THESE TERMS OF USE BEFORE USING THE CREDITKARMA.COM WEB SITE OR ANY OTHER WEB SITE OPERATED BY US (COLLECTIVELY, THE "SITES") OR ANY OF OUR MOBILE APPLICATIONS, OR OBTAINING AND/OR USING ANY OF OUR SERVICES. BY ACCESSING, BROWSING, AND USING THE SITES OR OUR MOBILE APPLICATIONS IN ANY WAY (INCLUDING BY OBTAINING FROM US A FREE CREDIT SCORE, RELATED ANALYSIS OF INFORMATION IN CONNECTION THEREWITH AND/OR PARTICIPATING IN OFFERS OF PRODUCTS OR SERVICES FROM OUR PARTNERS), YOU AGREE TO THESE TERMS. IF YOU DO NOT AGREE TO BE BOUND BY ALL OF THESE TERMS, PLEASE EXIT THE SITES, OUR MOBILE APPLICATION OR OTHER SERVICES IMMEDIATELY AND DO NOT USE THEM IN ANY WAY.The following are terms of a legal agreement (the "Agreement") between you and Credit Karma, Inc., a Delaware corporation ("Credit Karma", "we", or "us"), that sets forth the terms and conditions for your access to and use of our web and mobile services, including web and mobile Internet sites and mobile applications, including without limitation Internet Web site located at www.creditkarma.com and any other web sites operated by us (collectively, the "Sites") (however accessed and/or used, whether via personal computers, mobile devices or otherwise) and our Credit Karma mobile application(s) (the "Mobile Application"), which are owned and operated by Credit Karma, and your obtaining from us of a free credit score, related analysis of information in connection therewith and/or valuable offers of products and services from our Partners (such services, the Sites and the Mobile Application shall collectively be referenced as the "Services"). This Agreement also applies to your use of interactive features or downloads that: (i) we own or control; (ii) are available through the Services; or (iii) interact with the Services and post this Agreement. This Agreement governs your use of the Services. By accessing, browsing, and/or using the Services, you acknowledge that you have read, understood, and agree to be bound by the terms of this Agreement and to comply with all applicable laws and regulations. The terms and conditions of this Agreement form an essential basis of our bargain.
2. Specific Consents Granted upon Submission of Your Registration Form:
At the time that you submit your registration form to us to register for the Services and to obtain a free credit score and related analysis of information in connection therewith, you agree that you are providing to us the following specific consents (in addition to being subject to this Agreement):
I understand that by submitting this registration form I am requesting a copy of my consumer credit report and score; such submission shall therefore constitute "written instructions" in accordance with the Fair Credit Reporting Act for Credit Karma to obtain a copy of my consumer credit report and score from TransUnion, at any time Credit Karma requests until this Agreement is terminated and/or I terminate my account with Credit Karma’s Services. I further authorize TransUnion to provide a copy of my consumer credit report and score to Credit Karma, Inc. at P.O. Box 520, San Francisco, CA 94104-0520, at any time Credit Karma requests until this Agreement is terminated and/or I terminate my account with Credit Karma’s Services.
I further understand that by submitting this registration form I am authorizing Credit Karma, once it has obtained my credit report(s) and score(s) for me at any time, to retain a copy of such credit report(s) and score(s) in its records along with the other information I am submitting through this registration form (collectively, the "Registration Profile"), to use that Registration Profile to match me with product and services offers from time to time from its marketing partners, which offers it will send to me either by e-mail (based upon my communication preferences) or through the display of advertisements and to further use that Registration Profile to provide statistical analysis, reports and summaries of my Registration Profile in comparison to other users’ Registration Profiles. I understand that Credit Karma will not be sharing my Registration Profile with any of those marketing partners and that it is completely up to me to decide whether I would like to accept any of the offers I receive.
3. Partner Offers
We will not share your credit report and score with our Partners. However, we will match offers from Partners against your Registration Profile (as hereinafter defined), which would include your credit report and score along with other targeting criteria, in order to ensure that you receive offers that are tailored to you. One of the underlying philosophies behind our business, as reflected in the "Credit Karma" name, is that individuals who have through their efforts been able to maintain relatively good credit scores or who have worked hard to re-build their credit should be able to reap the rewards of those efforts, including by receiving discounted and favorable pricing and rates on the products and services that they enjoy. While we do not guarantee that the offers that you receive from our Partners will meet that goal, or that they will necessarily be the best offers available to you, we do represent and warrant to you that providing you with valuable offers for products and services from our Partners is one of the main animating objectives of our business. Our technology for matching your Registration Profile to the valuable offers for products and services provided by our Partners is proprietary and, in carrying out such matching, we may elect to consider, ignore, emphasize, or de-emphasize any relevant factors in our sole discretion. We do not guarantee that you will receive offers for any particular types of products or services.
4. Savings Estimates
We may use information about your credit card usage and data we have on current credit card offers to calculate how you might save money by transferring one of your credit card balances to another credit card. We may provide you figures and calculations of possible balance transfer costs, interest savings, value of rewards and bonus points, annual and application fees, estimated total savings and other information if you transfer a credit card balance; however, we provide such calculations for illustration purposes only. Such estimated figures are provided based upon our calculations and data only, and are neither endorsed nor commissioned by any of our Partners or third-party advertisers. We do not warrant or guarantee the accuracy, adequacy, timeliness, reliability, completeness or usefulness of any such estimated calculations, and we disclaim liability for errors or omissions in any such estimated calculations.
5. Receiving Your Credit Report
In addition to the free credit score you will receive from Credit Karma if you register for our Services, you are allowed to receive one free credit report under the Fair Credit Reporting Act from each of the three U.S. national credit reporting agencies (Experian, Equifax, and TransUnion) during any twelve-month period. You may also be able to receive free credit reports as permitted by state law (you may contact your state or local consumer protection agency or state attorney general to learn more about your rights under state law). For information on obtaining a free credit report from Experian, Equifax or TransUnion you may contact them directly at www.experian.com, www.equifax.com and www.transunion.com.
<Source: Terms of Use | Credit Karma >
The most important things you should note:
- Hobson’s choice – this is a “take it or leave it offer.” If you do not agree to the terms and conditions, you need to leave the site.
- This is a legal agreement.
- You authorize the release of your credit report to the company.
- You allow the company to retain all of your private credit to use to solicit you for additional offers. This is a classic lead generation technique.
- The company acknowledges that the offers may not be in your best interests.
- The company acknowledges that the calculation of any potential benefits may not be accurate or reliable.
- You can receive free credit reports without putting your personal information at risk.
Bottom line …
Most financial institutions and those who offer financial goods and services appear to operate on the grounds that disclosure satisfies the letter and intent of the law – even when the offer is obviously not in the consumer’s best interest or they cannot fully read and understand the contractual legal conditions governing the offer. In this particular case, the company does note that you are entitled to a free credit report under the Fair Credit Reporting Act and you can obtain it directly from the three credit companies identified by the internet addresses.
As with most things in life, Caveat Emptor – let the buyer beware.
-- steve
“Nullius in verba”-- take nobody's word for it!
"Acta non verba" -- actions not words
“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw
“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”
“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS "The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius “A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell “Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar “Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS