TransUnion, Equifax push their paid credit services

Customer tried over and over to exercise her right to cancel subscription with no success

“If you’re not angry, you should be. And we share your outrage. The labyrinth of confusing, overlapping and sometimes contradictory laws and policies designed to protect consumers simply isn’t strong enough.”

This is from a CNN.com commentary about the Equifax scandal, by U.S. Democratic Senator Richard Blumenthal and Terrell McSweeney, commissioner of the U.S. Federal Trade Commission (FTC).

They plan to develop a law allowing the FTC to investigate any data breaches of companies that hold sensitive data — even without proof of consumer harm. Being careless with consumer data in the first place would be seen as harmful.

I’m angry about Equifax for reasons that go beyond the recent security breach that exposed the sensitive information of 143 million Americans and 8,000 Canadians.

I’m angry about TransUnion, too. These two U.S. credit reporting companies, which are regulated here provincially, must give you a free copy of your credit report whenever you ask for it. But it can be awfully tough to exercise your rights, as I said in a 2010 column.

Both companies have a tradition of pushing paid services on the front pages of their websites and making you search for the free service.

Paid services include the credit score — a three-digit summary of your history and creditworthiness, ranging from 300 to 900 — as well as monthly services that alert you to changes on your credit report and credit score.

The law gives you free access only to a credit report sent by mail to your home. (“Kindly allow 5 to 10 days for delivery,” Equifax says.) This isn’t desirable if you need quick approval of a loan to buy a home or a car.

Luckily, you can get instant access to your credit report online. Unluckily, instant access is not free. Be prepared to hand over $15 to $25, depending on whether you get only your credit report or want to add a credit score, too.

Here’s another problem. Both Equifax and TransUnion offer a free or discounted credit score if you buy their credit monitoring services (from $15 to $20 a month). Cancel at any time, customers are told.

But exercising your right to cancel a subscription can be difficult, as well. I’ve handled a few such complaints from Star readers.

In a 2013 column, I wrote about a man who spent many months trying to reach Equifax by phone or email to stop the monthly withdrawals. He got a refund of charges back to the date he first tried to cancel after I contacted the company.

In a 2014 column, I wrote about two TransUnion customers caught on a treadmill of recurring charges for a monthly subscription (one didn’t even know he’d signed up for the thing). Both needed help to extricate themselves.

I recently heard from a customer with the same initials as mine (she didn’t want her name published). Last June, she set up a credit monitoring account for an introductory $4.95 a month — with the option to cancel after a month.

“I was attempting to put on a credit freeze,” she says about her motivation (a freeze lets you limit access to your credit report, which makes it hard for identity thieves to set up accounts in your name). “TransUnion said the only way to do it was to sign up for a month and then cancel.”

She was travelling all summer, but noticed a $16.95 monthly amount billed to her credit card. In early September, she tried to cancel again and again, with no success whatsoever.

“I called and wasn’t able to connect,” she said. “The support people are very nice and they give me the phone number to cancel. The problem is the phone number hangs up on me every time.

“I emailed every email address I could find and they bounced. I’m persistent, but I’m not getting anywhere.”

By the time I contacted TransUnion Canada chief executive Todd Skinner, the woman had cancelled her credit card and initiated a refund of the charges in July and August.

When TransUnion offered a free 12-month subscription for her inconvenience, she replied: “I don’t see a reason to subscribe, even for free, until you fix your systems.”

The company said it would use her feedback to add an online cancellation feature to make it easier to stop subscriptions.

Ironically, she could have avoided the whole time-consuming mess if she had been told the truth up front: You can’t block third parties, such as creditors, from getting access to your credit file in Canada.

A credit freeze is available only in the United States, which has stronger laws in this area. Canadians can only ask for an “alert”, which stops any request for a new credit product from proceeding until the prospective credit granter checks with the customer.

More on Equifax and TransUnion credit scores: CIBC and RBC now offer free credit scores to online banking clients. I suspect other banks will follow suit.

You can also get a free Equifax or TransUnion credit score from Borrowell, Mogo, Credit Karma and Ratehub, which use them as a lure to market other services to customers. Ellen Roseman’s column runs Tuesday in Smart Money. You can reach her at eroseman@thestar.ca.

Ironically, she could have avoided the whole mess if she had been told the truth up front: You can’t block third parties from access to your credit file