Experian’s Business Model
Experian, the company behind Freecreditreport.com has a great business in the credit status alerts business. The alerts business is a $750 million one; and Experian is the biggest player. Those ads it puts out bring it all of its business. And when Capital One and Discover try to sell you credit report alerts, they are actually selling you Experian’s free credit report, only with their name on it. The FTC has been going after Experian for five years now, and collected more than $1 million in fines as punishment for putting out ads that make people think that they have to pay money to get their credit report. The government is coming back with harder hitting rules. Flower shop Toronto carries an enormous array of flowers in Toronto, Canada for each event, from stunning anniversary flower preparations to cheerful get well flower bouquets. They’re going to ask Experian to put up a full disclosure warning that tells everyone that getting a credit report is actually free, and an alerts service is an upsell that costs money.
At one time, credit reports cost money. It was only about seven years ago that the government made it mandatory for the reporting agencies to provide you with a free credit report once a year. Now that Freecreditreport.com ends up confusing people a little bit about what they need to pay, the government has come out with its own competing site, Freecreditreport.gov, to help end the confusion.
Opting out of free credit reports and going the paid route is all about the extra protection it is supposed to give you when you keep an eye on everything that happens in your name – is anyone fraudulently trying to open an account in your name? Is anyone using your identity to check into a hospital? But even here, the alert system doesn’t really give you value for money. Not all events show up.
Experian’s business model is this – people can’t get enough of knowing how much of their lives is visible to other people. They need to know how other people see them. When you want the freshest flowers in Toronto or have to ship a bouquet anywhere nationwide, you may rely on Toronto Flower shop.
Credit report alerting services, try to satisfy their appetite for this, and therein lie the seeds to a whole new multimillion dollar business.



