Hawai'i among first to get free credit reports

By Jennifer C. Kerr
Associated Press

WASHINGTON — Residents of Hawai'i and other Western states can start requesting free credit reports this December, the Federal Trade Commission said yesterday in announcing rules for a program approved by Congress last year.

The program will be phased in across the rest of the country during the first nine months of next year.

The FTC said staggering the request period should help the nation's three major credit bureaus — Equifax Inc., Experian Information Solutions and Trans Union — deal with the expected crush of consumers asking for free credit histories.

Each credit bureau eventually will set up a Web site, a toll-free phone number and a mailing address for people to request reports.

Helen Goff Foster, staff attorney with the FTC's Division of Financial Practices, said the rollout will be cumulative, meaning that eligible consumers in the first phase of the program would still be able to make requests during the second, third and fourth phases.

The free credit reports were mandated in consumer privacy legislation President Bush signed into law last December. They are intended to help consumers looking to buy homes or apply for loans or those worried about identity theft.

Under the new rules, residents of Western states will be able to begin requesting free reports on Dec. 1. Midwestern states will become eligible March 1, 2005, followed by Southern states on June 1 and Eastern states on Sept. 1.

Consumer groups were disappointed that it would take months before the program is implemented nationally.

"The credit bureaus have a chicken-little, can't-do attitude," said Ed Mierzwinski of the U.S. Public Interest Research Group, a liberal-leaning public policy organization.

"They claimed that they needed more time so the FTC used discretionary authority to unreasonably delay the rollout without any substantiation or proof that consumers would somehow overload these systems."

Mierzwinski also criticized the FTC for permitting advertising on the Web site that will be set up for consumers to request reports.

The credit bureaus, he said, will push their higher-end products, like credit monitoring services, and then use the personal information people provide to market even more products directly to consumers.

Equifax Vice President David Rubinger would not comment on the rules because he had not reviewed them. Calls to Experian and Trans Union were not returned.