Federal law guarantees free credit reports each year, but many consumers who got theirs from FreeCreditReport.com unintentionally paid for an expensive credit monitoring service.

So far, the F.T.C. has focused mostly on the free credit report come-on. In the last five years, Experian has paid $1.25 million to settle F.T.C. charges that it misled consumers who may have been seeking their free credit report at AnnualCreditReport.com, but ended up paying for a subscription on the similarly named freecreditreport.com.

Credit monitoring provides customers with real-time updates about changes to their credit files that might affect how lenders see them. These services can be useful for identity theft victims, for example, who want e-mail alerts about new accounts that thieves might have opened in their name.

Yet for the vast majority of consumers whose credit status doesn’t change quickly or drastically, a monitoring service is a waste of money, these critics say. Keeping a close eye on your bills and checking your credit report several times a year is enough.

Source:

LIEBER, RON. “A Free Credit Score Followed by a Monthly Bill’.” Credit Scores . 2 November 2009.  The New York Times. 3 November 2009. <http://www.nytimes.com/2009/11/03/your-money/credit-scores/03scores.html?partner=rss&emc=rss&pagewanted=all>.