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The Federal Trade Commission has stopped an online scheme that allegedly lured consumers with “free” access to their credit scores and then billed them a recurring fee of $29.95 per month for a credit monitoring program they never ordered. The three companies have agreed to pay $22 million for consumer refunds under a settlement with the FTC and the state attorneys general in Illinois and Ohio.

The defendants marketed their credit monitoring programs, MyCreditHealth and ScoreSense, through at least 50 websites, including FreeScore360.com, FreeScoreOnline.com and ScoreSense.com. According to the FTC, they bought advertising on search engines such as Google and Bing so that ads for their websites appeared near the top of search results when consumers looked for terms such as “free credit report.” The most prominent ad stated, “View your latest Credit Scores from All 3 Bureaus in 60 seconds for $0!”

According to a complaint filed by the FTC, Illinois, and Ohio, the defendants failed to clearly disclose that consumers who accessed their credit score through their websites would be enrolled in a credit monitoring program and incur monthly charges until they called the defendants to cancel. At least 210,000 consumers contacted banks, credit card companies, law enforcement agencies, and the Better Business Bureau to complain about the scheme.

The only way consumers could cancel their membership and request refunds was to call a toll-free number. Consumers often had to make repeated calls to secure their cancellation or refund. The defendants often denied refunds to those who claimed they did not knowingly enroll.

The FTC alleged that the defendants violated the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA), which prohibits charging consumers for goods or services sold online via a negative option unless the seller clearly discloses all material terms before obtaining the consumer’s billing information, obtains the consumer’s express informed consent before making the charge, and provides a simple way to stop recurring charges. They were also charged with violating the Illinois Consumer Fraud Act and the Ohio Consumer Sales Practices Act.

Under the proposed settlement order announced today, the defendants are permanently prohibited from violating ROSCA, misrepresenting material facts about any product or service marketed with a negative option, misrepresenting material terms of any refund or cancellation policy, and failing to clearly disclose, before a consumer consents to pay via a negative option, all materials terms of any such policy. They are also barred from failing to honor a refund or cancellation request that complies with such a policy, and failing to provide a simple mechanism for consumers to stop recurring charges – at least as simple as the mechanism consumers used to initiate the services.

In addition, the defendants are prohibited from failing to disclose, before a consumer agrees to pay for something via a negative option, the name of the seller or provider or the name of the product or service as it appears in billing statements, a product description and its cost, the length of any trial period, and the mechanism to stop any recurring charges. The defendants are also barred from using billing information to obtain payment for any product or service marketed with a negative option without the consumer’s prior express informed consent, as prescribed in the court order.

The defendants are One Technologies LP, also doing business as ScoreSense, One Technologies Inc., and MyCreditHealth; One Technologies Management LLC; and One Technologies Capital LLP.

The Commission vote authorizing the staff to file the complaint and proposed stipulated order was 5-0. The proposed order was filed in the U.S. District Court for the Northern District of California, San Francisco Division, on November 18, 2014.

The FTC would like to thank the attorneys general of Illinois, Ohio, and Texas for their invaluable assistance during this investigation.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. Stipulated orders have the force of law when signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.