Fool Me Once, Shame On You But Fool Me Twice.... In aiming to settle a class action suit, a group of companies is throwing a proverbial pie in the face of affected consumers.
A Security Fix reader forwarded an e-mail about a benefit he allegedly was eligible to collect as a result of a class-action settlement over services offered by a subsidiary of Experian, one of the three major credit reporting bureaus.
I immediately sensed a phishing scam after reviewing the e-mail and the third-party site touted in the message, which asks the visitor to enter a Social Security number and birth date. But it turns out that the site is legitimate, although extremely insensitive to consumers.
The class-action case referenced in the e-mail is the latest in a series of lawsuits against Consumerinfo.com. The firm promised free credit reports but allegedly failed to clarify that it would charge a customer's credit card $79.95 for a "credit monitoring service."
In yet another insult for affected consumers, the Web site providing more information about the settlement encourages affected individuals to further expose their personal data online.
Consumerinfo.com agreed last week to pay $300,000 to settle charges brought by the Federal Trade Commission that it violated the terms of a previous settlement with the agency over the misleading "free credit reports." It was originally fined $950,000.
The impersonal e-mail was sent to consumers from browningnotice@gardencitygroup.com. It begins: "NOTICE FROM FEDERAL COURT. PLEASE READ. Records show that you entered into an agreement over the Internet with Consumerinfo.com or an Experian entity to purchase any Credit Check or Credit Check Monitoring (which were formerly known as CreditCheck Monitoring Service), Credit Manager (including Yahoo! Credit Manager), Triple Alert, or Triple Advantage credit-monitoring product, or you paid for a credit score sold on a Web site that also sold one of these credit-monitoring products, between June 17, 1998 and December 27, 2006. If so, you may be eligible to receive a benefit under the proposed settlement."
So, exactly what is this perk? It's 60 days of free credit monitoring service from Experian. If you don't cancel this "benefit," Experian will bill you $9.95 per month after the initial 60 days.
The e-mail details the terms of the settlement:
"If you choose credit monitoring, and you don't cancel your credit-monitoring membership after using your code to obtain the credit monitoring benefit but prior to the expiration of the 60 day, settlement benefit period, you will be billed at the then-applicable rate, which is currently $9.95, for each month that you continue your membership."
If you were an individual burned by this bogus "free credit report" offer who wasn't already insulted enough, go to browningsettlement.com, the site erected by Melville, N.Y.-based Garden City Group, a company that administers class action settlements.
The Web site includes a link to "update your contact information," where it asks a visitors to enter a Social Security number and birth date. Phishing scams almost always try to dupe people into entering personal data at fake bank and e-commerce sites by blasting out e-mails telling people they need to "update" their information. I spoke with the contact who registered the site, Frank Dmuchowski, but he referred me without comment to Garden City's public relations staff. That person in turn referred me to a woman at Experian, with whom I'm currently playing phone tag.
How else does this whole operation resemble a phishing scam? The e-mail does not address the recipient by name. It contains some very elaborate explanations and legalese that is somewhat akin to a Nigerian scheme. There is also the element of urgency. Recipients are told that if they do not respond within a given period of time, they will give up their rights to sue the company in as part of a class in any other lawsuit. Maybe that's one reason why we have seen phishing scams disguised as settlement offers succeed so well: settlement companies are conditioning consumers to respond to them, and the federal courts are encouraging this practice.
But wait, there's more. While a federal court has deemed it acceptable for companies like the Garden City Group to communicate with people this way via e-mail, anyone who wants to object or exclude themselves from the settlement terms must do so by snail mail by May 15. Anyone who wants to accept the dubious settlement benefit, however, is free to do so by e-mail.
Please do not let this May 15 deadline slip away. Write to the Browning Settlement Administrator to tell the court why you think the settlement stinks:
Objections-Browning Settlement Administrator
P.O. Box 91141
Seattle, WA 98111-9241
In addition, you can request to speak in court about the fairness of the settlement at a hearing on July 31.
Under federal law, all U.S. citizens are eligible for a free copy of their credit report from each of the three major credit reporting bureaus: Experian, Equifax and Trans Union. Consumers should take advantage of this benefit, but only by visiting http://www.annualcreditreport.com or calling a toll-free number: 1-877-322-8228. You will get the most mileage out of your free reports if you scatter them across the entire calendar year by contacting a different credit bureau every four months.
Update, 3:50 p.m.: I heard from Experian spokesperson Heather Greer, who said that all communications were reviewed and approved by the court in accordance with the settlement." With regard to this settlement, we felt that this was the best way to inform consumers as soon as possible as to the products they were entitled to as part of the class," Green said. She added that the settlement site also includes a toll-free number (1-800-399-4322) that consumers also can use to either opt-out or accept the terms of the settlement. [Security Fix]
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