We all know the jingle for “free” credit reports, but a new wave of legal action in 2026 is exposing the expensive reality behind these zero-cost promises. A major class action lawsuit has gained momentum against credit monitoring giants, alleging that they use dark patterns to trick consumers into unintentional subscriptions. The core of the complaint focuses on the bait-and-switch tactic, where a user signs up for a “free” credit score or a $1 trial, only to be quietly enrolled in a monthly CreditWorks or PrivacyGuard membership costing $24.99 to $29.99. These fees often appear on bank statements under vague names like Identity Secure or Credit Check, leading many consumers to overlook them for months. If you signed up for a free score recently, you need to check your bank statement immediately for this recurring zombie charge.
The Negative Option Trap
The lawsuit highlights a billing practice known as a negative option, where the service assumes you want to keep paying unless you aggressively opt out. When you enter your credit card information to verify your identity for the “free” score, the fine print, often hidden below the “Get My Score” button, authorizes a recurring charge after a 7-day trial period. In 2026, regulators at the FTC declared war on these tactics, labeling them as deceptive if the cancellation process is harder than the sign-up process. The suit alleges that while signing up takes one click, cancelling requires navigating a labyrinth of phone menus or broken web links. This friction is designed to keep you paying the monthly fee out of frustration.
The $1 Trial That Isn’t Cheap
A common variation of this scam involves the one-dollar credit report, which seems like a safe, low-risk transaction. However, the lawsuit claims that this $1 payment is actually a verification token that authorizes the billing system to charge the full $29.95 membership fee seven days later. Consumers argue that the total: $1.00 displayed at checkout is misleading because it does not clearly display the future recurring costs in the same visual field. By the time the user realizes what happened, they have often paid over $100 in fees for a service they thought was a one-time purchase. The hidden fee here isn’t a surcharge; it is the subscription itself.
The PrivacyGuard Connection
In addition to the direct-to-consumer sites, the lawsuit investigates add-on services like PrivacyGuard, often sold through credit card partnerships or retail accounts, like Kohl’s. Users report being enrolled in these credit monitoring services during the checkout process or activation call without explicitly agreeing to the monthly cost. The charges, often around $14.99 a month, are buried in the credit card statement, blending in with regular purchases. Because the fee is billed by the card issuer or a third-party affiliate, it often bypasses standard fraud alerts. It is a parasitic charge that feeds on your existing credit line.
How to Get Your Money Back
If you find this fee on your statement, you must call the customer service number listed next to the charge immediately; do not just dispute it online. Tell the representative you are cancelling due to unauthorized enrollment and request a refund for all prior months, citing the pending class action litigation as your reason. Many of these companies have retention scripts designed to offer you a lower rate to stay; you must firmly refuse and demand a full cancellation and refund. Record the cancellation confirmation number, as these services are notorious for accidentally continuing to bill you.
Check Your Free Accounts
If you use Credit Karma, Experian, or TransUnion apps, log in and verify your membership level. It should be set to free or basic. If you see premium or plus, you are likely paying for it. Call customer service immediately, then call your credit card company. You shouldn’t be misled when trying to access your credit information.
Did you find a $29.99 charge from a credit site this month? Leave a comment below.
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