The local operation of Britain’s Experian Group Ltd. is shifting its marketing focus away from the company’s troubled FreeCreditReport.com service to a new site focused on credit scores.
Experian, which has offices in Costa Mesa and Irvine, recently started FreeCreditScore.com, an online service that offers credit scores along with the company’s credit monitoring service.
“People are really focused on what their credit score is,” said Chris Moloney, senior vice president and chief marketing officer of Experian’s U.S. consumer direct unit. “People want to know what their score is and how it relates to other people.”
FreeCreditScore.com is similar to the company’s FreeCredit-Report.com, known for its quirky commercials featuring members of a rock band down on their luck because of bad credit.
FreeCreditReport.com offered a credit report with enrollment in Experian’s TripleAdvantage credit monitoring service.
The site’s advertising gained FreeCredit-Report.com national attention and became a bit of pop culture. But the commercials also have brought bad press and regulatory scrutiny for Experian.
In 2005, the Federal Trade Commission sued Experian, alleging deceptive marketing practices. It later collected more than $1.2 million in settlements.
Regulators said Experian misled consumers by not making clear they would be charged $79 for an annual credit monitoring subscription after they signed up at FreeCreditReport.com.
The site’s “advertising was a little unscrupulous,” said Brad Strothkamp, an analyst at Forrester Research Inc. in Massa-chusetts. “Consumers were getting free credit reports, but with strings attached.”
Experian and others face increased regulation over credit reports under the federal Credit Card Act of 2009, which took effect in February.
With a shift in focus from credit reports to credit scores, Experian is hoping to skirt the FTC’s biggest contention with the company.
As a public service, the FTC offers consumers one free credit report a year and contends it is the only source of no-strings-attached reports.
FreeCreditScore.com works largely like FreeCreditReport.com. The new site also offers a free trial to Experian’s Triple-Advantage credit monitoring service that the company hopes to convert to a paid subscription.
“We’re promoting FreeCreditScore.com as the same company and similar product,” Moloney said.
The company is keeping FreeCredit-Report.com for now, according to Moloney.
“We’re diversifying and we haven’t eliminated products because of regulatory reasons,” he said.
Competitors
Experian is facing more competition in credit reports. Newer rivals include Costa Mesa-based ConsumerDirect’s SmartCredit.com and San Francisco’s Credit Karma Inc.
Both offer services similar to Free-CreditReport.com by providing credit
monitoring and suggestions on how to improve credit.
“There is a lot of competition in the mix and not even from the traditional major credit reporting agencies,” Forrester’s Strothkamp said. “There are a growing number of smaller niche players that are focused on improving consumer credit.”
Even Minneapolis-based Fair Isaac Corp.—namesake of the FICO credit score—is seeking to offer a credit score service to banks that would allow their customers to see credit scores online.
Experian has started promoting Free-CreditScore.com with commercials featuring credit scores as furry, unruly pets.
The company is estimated to be spending $10 million to $15 million on the initial launch effort for FreeCreditScore.com.
The Experian unit spends an estimated $300 million on advertising in print, network and cable TV spots annually. The company has upped media buying in the down economy.
