In August 1997, QSpace (now owned by Experian) was first to bring credit report data to the Web. The cost was $12 per report (see note 1), a price that has changed little over the ensuing 10 years.

Three years later, in October 2000, WorthKnowing.com introduced the concept of ad-supported (i.e., free) credit scores (see Online Banking Report, #66, article reprinted here). But the company failed to make it through the dot-com crash and ceased operations (note 2). Both QSpace and WorthKnowing earned OBR Best of the Web awards for their innovations.

It took seven years for the concept to reemerge, but now two Bay Area rivals are offering free credit bureau info in exchange for permission to present credit and other product offers. And just as I was about to finish this post yesterday, Quicken Loans introduced Quizzle, a personal finance/credit portal that also offers free credit bureau info (yesterday's post here).

Here are the players:

•  Credit Karma: This San Francisco-based startup, with backing from Prosper's Chris Larsen, is delivering an actual credit score computed by TransUnion, one of the three major U.S. credit bureaus. It does not precisely match the commonly used FICO score from Fair Isaac. And the scale is different, with a top score of 900 instead of 850. The credit score service is still in closed beta, but we'll see if we can get some invites from the company. Credit Karma will be presenting at our FINOVATE Startup conference April 29 in San Francisco, if you want to meet the team behind this new service.
•  Credit.com: Another San Francisco company, but one that dates back to 1995, recently launched a similar system, called the Credit Report Card. Credit.com CEO, Adam Levine, presented his other company, Identity Theft 911, at our inaugural FINOVATE conference last fall in NYC (video here). Credit.com provides a full evaluation of your actual TransUnion credit report and assigns letter grades to five different components of the overall score (see third screenshot below). The score is shown on a chart at the top that appears to top out at 850. The report is extremely well done. Like Credit Karma, the company earns fees from targeted offers. In our case, we were given a choice of applying for two Citibank cards.   
• Quizzle powered by Quicken Loans: Quizzle's business model is completely different because it's run by a financial institution instead of a lead generation site. The idea here is to get customers and prospective customers to use Quizzle frequently so that when the time comes for a new mortgage, the user remembers to apply at Quicken Loans. See yesterday's post for a complete overview.

Credit Karma homepage (15 Feb. 2008)

Credit.com Credit Report Card homepage (15 Feb 2008)

Credit.com Credit Report Card (top portion, detailed analysis of each section not shown)

Note:

1. QSpace charged $12 for the first credit report, then $5 each to reorder. Data was from Experian (see Online Banking Report #28).

2. TransUnion now owns the WorthKnowing domain name.

Two years ago, computerized personal financial management was a two-horse race: Intuit's Quicken vs. Microsoft Money. Both full-featured. Both relatively easy to use. But both were packaged software apps, clearly not the future of consumer computing.

Fast forward to 2008: We now have two dozen startups, several banks, and other financial stalwarts, offering online personal finance of every size and shape (see Online Banking Report 142/143 and 131/132).

The latest entrant: Quicken Loans, which launched an open beta of Quizzle, an online budget and personal finance portal that features home values, mortgage advice, and free credit reports/scores from Experian (see note 1).

Quizzle also calculates what it calls your Quizzle score based on your credit score, home value, savings, debt, and household income/expenses (see second screenshot, below). Debt payments are imported from credit report data, but users can edit the information or add other items to improve the results.

Quizzle also provides home-value estimates calculated from public records, but in my case, it's no Zillow, and listed a home value that was significantly wrong (see note 1).  But it's simple to edit the number with your own estimate. Quicken Loans should consider tapping Zillow's API to provide a second opinion.

The sign-up process
Signup is simple with users providing name, address, birth date, email address, income, and home-purchase date. Email address is verified with a message that must be confirmed. Then identity is verified online using data pulled from the Experian credit bureau.

This is the same procedure used by every online credit-report provider with one huge exception. Quicken Loans DOES NOT REQUIRE A SOCIAL SECURITY NUMBER, a huge usability and privacy gain. The company is allowing credit-report access based on a name/address/birth date match. That's a welcome improvement for the user.

Analysis
There are a few rough edges in the tool. The home-equity portion is not well explained. In my example, my home value was shown to be about $50,000 more than the loan balance. However, in the equity portion of the tool, it showed that my home equity to be zero. Evidently, the site uses an 80% LTV criteria to calculate the amount of home equity available to lend against. While that's a perfectly reasonable assumption in today's credit environment, it should be spelled out in detail.

But overall, it's a great tool. The really free credit report and score alone are enough of a payback to gain consumer usage. The rest of the Quizzle score is less useful, but still interesting. And seeing it all in one place is fantastic. It will be interesting to see how Quicken Loans pulls me back to the site in the future.

Quizzle is off to a great start, and I look forward to seeing more companies, including banks, credit unions, and card issuers, integrate credit scores/reports into their online offerings (see note 2).

Overall scores:
    Look and feel (user interface) ==> A
    Credit information ==> A+
    Other tools ==> B
 

Quizzle home (18 Feb. 2008, prior to entering a ZIP code)

Overview pages showing the makeup of the overall Quizzle score
(upper right)

Note:

1. Quizzle uses a 900-point scale for credit scores, padding 50 points to everyone's score compared to Fair Isaac's FICO that tops out at 850. This makes you feel a little better about your score. No doubt, credit score inflation will continue, with someone using a 1,000-point scale in the near future. 

2. WaMu has provided free credit scores to credit card customers for several years.

Coincidently, the same day I received my first alert from Experian's FreeCreditReport credit-monitoring service (see yesterday's post here), the company revamped its website's account-management area. The thing you notice right away is the focus on upselling subscribers to the new ChildSecure family plan (see first screenshot below).  

The cost is an extra $6.95/mo, which seems like a good value, considering that you can cover all your kids with a single fee. But the total monthly fee on my plan rises to an eye-popping $18.95/mo or $227 annually. That's a significant investment and hard to justify unless you've previously been burned by fraud (for more on the price/value equation, see our Online Banking Report on the subject published in August).  

Screenshots (24 Oct. 2007)
Logging in yesterday, I was greeted with this popup in front of the grayed-out main page.

They also sell it in a huge banner across the top of the main page and a tab for the ChildSecure option.

Finally, here's the page you see after clicking on ChildSecure tab.

Here's the email sent yesterday announcing the website redesign:

Today I received my first alert (see screenshot below) since subscribing to Experian's credit-monitoring service about 4 weeks ago. While I appreciate the heads up, the user experience is not at all what I want.

Here are the problems: 

1. Cries wolf. All the alert tells me is that there was a "key change" posted to my file. Is it a routine credit inquiry (which I was expecting) or did someone just open an account at Best Buy in my name? The only way to find out is to log in to my FreeCreditReport account, which took three minutes since I couldn't remember the username/password. Please provide more info in the alert so I can better gauge the severity of the situation.

2. Not phish proof: While Experian does use my first and last name in the salutation, thereby improving believability, additional personalization is needed to help users know it's genuine, especially when the company's log-in process requires input of a social security number confirmation after login. 

3. Not enough trust: I've worked with Experian for more than a decade so I know and trust them. However, the average Joe/Jo doesn't really know whether FreeCreditReport is a trustworthy company or not. Credit monitoring alerts are too easy to miss if they don't come from a recognizable and trusted name. It would be much better if they came from the user's financial institution or card issuer, someone with whom they do business on a monthly basis, so the emails don't end up in some spam filter.

4. Not integrated with online banking: I really don't want to remember yet another username and password, nor do I want to spend five minutes of my day logging into another website to verify there are no criminals using my credit files. Credit monitoring and credit scores should be integrated into online banking so I can keep track while doing my normal banking.

5. Doesn't tell me what to do: In this particular case, I knew about the inquiry, but what if I didn't recognize it. The website doesn't provide any info on what to do if I did not authorize the inquiry, which could be the first sign of serious identity takeover (see screenshot below).

For more information, see our recent Online Banking Report on Credit Monitoring Services here.

Email alert from Experian's FreeCreditReport service (24 Oct. 2007)

I was looking at Geezeo's new Facebook app this morning (more on that later), and I noticed one of the best credit report monitoring ads I'd ever seen. 

Instead of focusing on the negative aspects of your credit history, the banner ad features "testimonials" of the significant savings available with good credit (the banner above claims a $310 savings in her house payment). The stories are provided under the header, "Credit Diagnosis." And, I was initially impressed after clicking through the ad to find a good, landing page with more of the same.

However, the mostly-anonymous company behind the banner, FreeCreditReportsInstantly.com uses a $1, 7-day trial come-on for its $29.95/mo credit report monitoring service. I have no problem with the company charging what the market will bear. And to its credit, FreeCreditReportsInstantly (FCRI) does disclose the go-to fee on the first page of the application. But I think the typical young Facebook user is not going to be happy seeing $29.95 monthly fees on the credit or debit card.   

Why would anyone pay $360/yr for credit monitoring?
The Internet was supposed to make it hard for companies to charge 2x to 3x the going rate when dozens of competitors were just a few clicks away. But here we have a company doing just that and evidently bringing in enough revenue to afford a Facebook ad buy, not to mention holding down the number 3 ad slot on Google searches for "free credit reports" (note 1)?

The answer is complex. It has to do with consumer confusion over the whole business of credit scores, ID theft, and the government-mandated free reports which is what most Googlers are looking for when they type "free credit report." And consumers must share part of the blame too. In a rush to get "something for nothing" they blindly fill out "free trial" forms without reading the fine print or taking time to investigate alternatives.

Taking the high road
But the dizzying array of credit monitoring options provides an opportunity for banks and credit unions to do the public a great service, and turn a nice profit, by educating their customers and offering value-priced alternatives: 

1. Credit scores/monitoring: Instead of pushing credit monitoring services that are too confusing and too expensive for the mass market, provide customers with their credit score each month, and if it takes a dive, alert the customer and provide the tools to access their credit report to investigate any potential problems (see our post yesterday and note 2).
2. Identity fraud support: Citibank's Identity Theft Solutions advertising blitz was a nice humorous break from most bank advertising. However, I think it did a disservice by making full-blown identity fraud seem more commonplace than it really is. Consumers needn't be frightened, they need to be careful, they need to understand what to look for, and they need to know where to turn in the event of suspected fraud.

And since most banks and credit unions don't have the resources to provide full-service fraud assistance, turnkey solutions providers have stepped up to fill the need. We are lucky to feature one such company at our Finovate conference next Tuesday in NYC.

Full-service education and victim response from Identity Theft 911
Five years ago, I met the entire Identity Theft 911 team when they were in Seattle making sales calls. It was refreshing to see someone in the identity fraud space taking a genuine interest in helping the end-user out of a jam, rather than simply trying to get them on the hook for a $150+/yr monitoring service. And over the years, I've kept in touch with the company chairman, Adam Levin, as he's worked the trade shows to garner support for Identity Theft 911 and his other company, Credit.com. Adam will take the stage Tuesday morning in NYC to demonstrate the full range of his company's resources to help banks and credit unions make their customers feel MORE secure, rather than more afraid (see screenshot below of AFL-CIO Employees Federal Credit Union's Identity Theft 911-powered services, link here).  

Note:
1. Search performed from Seattle IP address mid-morning on 26 Sep 2007.   

2. For more information on credit monitoring, see the latest Online Banking Report here.

Just like a fluctuating body temperature is an indicator of your underlying health, your credit score is a similar measure of your financial well being. Yet, in a recent poll of Facebook users age 18-24, we found that fewer than 20% had seen their credit report or credit score within the past year (see note 1, 2).

Furthermore, today's tightened credit market has put a premium on having a good credit score, even in the upper end "prime segment." Here's the tease from the top of the Personal Journal section of today's Wall Street Journal, "Lending squeeze raises the bar on credit scores." (article here, see note 3).

Clearly there is a need here. Most U.S adults, especially younger ones, should track their credit score at least quarterly. However, fewer than 10% of adults subscribe to credit monitoring services, partly because of their cost and partly because of the hassle (see note 2).

Banks, credit unions and card issuers are ideally suited to fill this gap. At a minimum, low-cost one-click access to their credit score would provide customers with an important early warning system to stave off potentially debilitating personal finance woes (note 4).

Notes:

1. Be aware that this is a completely unscientific online poll of 200 Facebook users who say they are age 18-24 in their Facebook profile. The results should NOT be projected to the larger population. It was conducted on July 23, 2007 by Online Banking Report (see note 2).

2. For more information, see the latest Online Banking Report on Credit Monitoring.

 3. And over at another Dow Jones effort, the FiLife blog, the writers have been on a bit of a mission to pressure banks and card issuers to make credit scores freely available to customers (see post here). FiLife is a joint effort between Dow Jones and IAC, the parent of Lending Tree and GetSmart.  

4. According to the FiLife article cited above, among top-10 banks, only WaMu currently provides free access to credit scores for its credit card customers (see inset).

In terms of website design, I find most Citibank pages to be somewhat busy. But overall, the pages usually work well due to the eye-catching graphics, appropriate use of colors, and good copywriting.  

I've had a Citibank Business AAdvantage credit card for at least a decade. Even though I don't visit the site often, maybe once every few months, I find that it's generally easy to find what I'm looking for. 

As you can see in the business card example below, the bank uses purple and green "buttons" to catch your eye, then inserts important key words within them to drive action:

1. The purple, "Fraud is not your fault" reinforces that customers are not liable for unauthorized transactions, something most people are still concerned about, even though their liability is minimal. The button leads to a page that discusses advanced fraud fighting tools such as virtual account numbers and a picture card.
2. The navy, "How much have I spent lately?" allows users to quickly drill down into a key area of concern for most card users. Although not as powerful as Wells Fargo's My Spending Report (previous coverage here), it's still a good starting point for many users.
3. Finally, the bright green, "Help prevent an identity crisis" pitches the bank's credit monitoring solutions (note 1).
   

Citibank Business Credit Card main account overview page (22 Sep 2007)

Note:

1. For more information on bank and credit union opportunities selling credit report monitoring see our most recent Online Banking Report.

Today, I was home for lunch and my son was watching a recorded episode of Myth Busters, a great show as anyone with a pre-teen child knows. As he was fast-forwarding through the commercials, I happened to see a glimpse of a LifeLock spot (see inset).

My son knows I like the commercials better than the shows, so he graciously replayed the entire thing for me. It seemed to go on forever, he said, "like a sponsored program of its own." Which from him is actually a compliment, I think. I checked out the replay online and saw that it was a 2-minute spot (note 1).

It features street scenes of New York (I think). It plays like news coverage as the big "billboard trucks" drive through town plastered with CEO Todd Davis's social security number in red, 3-foot high numbers. Interspersed are man-on-the-street soundbites from astonished pedestrians and a great testimonial from a LifeLock customer who credit the company from saving him from having someone buy an $83,000 RV in his name. It also has Mr. Davis pitching the product through a bullhorn on a crowded Manhattan street.  

It's a real in-your-face commercial, but I really liked it. It does a great job of grabbing attention, reinforcing the benefits, and providing a can't-miss call-to-action. It's a good compliment to the over-the-top print ads featuring the CEO's social-security-number (see previous coverage here and note 2).

LifeLock uses two different URLs in the commercial, the normal <lifelock.com> and <lifelocktv.com>. Both point to the same page now, but the company must be considering a distinct landing page for the TV URL.

The video is available in the lower-left corner of the company's homepage (below). For more information on the market for credit report and identity theft services, see our most recent Online Banking Report here.

Note:

1. The commercial doesn't appear to be on YouTube yet, so I was unable to post the actual spot here.

2. A half-page version of LifeLock's social-security-number ad was in a recent WSJ.

Just a quick note to let you know that the latest Online Banking Report has just been uploaded to our website. It's title: Online Credit Monitoring Services: The robust business case for financial institution distribution. I'll post some conclusions from the report later, but you can read the abstract here. 

Subscribers, you can download it now (here) free of charge. Everyone else, it's US$595 on its own, or for "just" $500 more you get the new report plus a stack of others, including our report on Social Personal Finance, Mobile Banking, Mobile Payments, the latest online banking forecast and more. 

Want a shock? Open today's Wall Street Journal to p. D3 (West Coast edition).

You'll see a full-page, black-and-white ad featuring LifeLock CEO Todd Davis's social security number in a massive reverse-type, page-dominating format. There is also a 1/4 scale photo of a smiling Davis holding his social security card out to the camera. The ad offers a 30-day free trial using the WALL10 promo code, before reverting to the normal $10/mo price.

The WSJ spread will be less of a surprise if you've seen LifeLock's television spots or website recently, where the same technique has been used for some time (see screenshot below).

Although the ad may partly be for PR in the investment community, the relatively large spend demonstrates just how lucrative, and appealing, financial security services can be. We'll look at LifeLock and the whole identity theft/credit monitoring space in our upcoming Online Banking Report, due out in about 10 days.

This week, I took a two-day break from writing the next issue of Online Banking Report, an update to our popular report on Credit Bureau Monitoring and Identity Fraud Protection (2002 report here), to attend the Mobile Commerce Summit. 

Much to my surprise, an email received today nicely integrates those two topics. The offer sent was sent with the subject, "Mobile Identity Theft Protection," and it came from WireFly an online wireless reseller where I'd previously purchased a Blackberry.   

Very interested to see the mobile connection, I looked at the full message (below), a well-crafted offer for Identity Guard services from Intersections. The seemingly to-good-to-be-true offer: a full year of credit monitoring, with SMS alerts, free of charge.

Apparently, Intersections, like PayPal and SunTrust, is using free credit report monitoring as an introduction to its full-service credit report and ID theft protection services. It's an aggressive move that has repercussions for the industry. We'll look at its strategy in detail in the new report to be published in July.

Who'd have guessed banks would become a popular source of holiday gifts, other than good old-fashioned greenbacks of course?

Now that niche audiences can be targeted with online promotions during the holidays, many financial institutions are marketing financial products packaged as gifts. Prepaid Visa/MasterCards are the hottest item, but there's also potential in other areas. 

Gift cards
The second most popular gift item this year, after apparel, is expected to be prepaid cash cards. While the majority of the $20+ billion purchased will be direct from retailers, hundreds of banks and credit unions, such as Boeing Employees Credit Union (BECU) have joined the fray (see email below). If marketed right, financial institutions could gain a significant share of total sales. See our previous post here about integrating gift cards into online banking for more information.

Credit reports
Equifax is taking advantage of the giving season to market credit reports and/or FICO score gift certificates. The cost is $20 for a three-bureau credit report, $15 for the FICO score and explanation, or $30 for both (see email below). An even better gift would be a year of credit monitoring.

Investment accounts
For years, ShareBuilder has marketed "the gift of stock" during the holidays. This year, many of its partners, such as National City Bank, are offering a $50 gift card as a bonus for new accounts (see screenshot below). That way grandma and grandpa can give junior something that's good for him, an investment account for the future AND something he'll actually like, $50 to spend at the mall.

Piggy bank 2.0
For the younger set, ING Direct has for a year been selling The Savings Machine, a toy bank/calculator/ATM machine. And judging from the note on its website,* it's proving to be a popular Deal of the Month with a lower $17.95 price tag which includes free shipping (see inset). Several years ago, ING Direct reported nearly a million dollars in sales from its online merchandise store <shop.ingdirect.com>, an inexpensive way to get its name on the street.

*Note by the "Savings Machine" product page today: All orders placed from 4 Dec to 11 Dec will be shipped out the week of 11 Dec due to the large amount of backorders.

Texans Credit Union <texanscu.org> has added complimentary ID theft insurance and help services to their checking accounts. The new service is promoted through a somewhat confusing "Upgrade Now" call-to-action near the bottom and a large graphic (which rotates with two other spots) in the middle section of its gorgeous homepage (see screenshot below; notice how they use drop shadows to highlight the page).

Analysis
It's an OK perk, but doesn't do anything to help members prevent ID theft. To do that, members need credit report monitoring, which is available for $70 to $140 per year from the credit union's co-branded program with Identity Fraud Inc. (see screenshot below; read the full terms and conditions here).

However, it's not clear on subsequent pages whether members must take action to get the free service and which options they should choose to upgrade to credit report monitoring. We'd like it better if the credit union were more upfront about what is and is not included, and what the member must do.   

I'm a sucker for holiday-themed messages. There's something about a big, well-timed graphic that makes an email stand out from the crowd.

Here's the latest from TrueCredit, a prolific emailer to ex-customers such as myself. I usually hear from them every week or two.

Date: Tue 24 Oct 2006 9:27 AM
From: TrueCredit [truecredit@email.truecredit.com]
Subject: Autumn Special: James's 3 credit scores

Personalization used: My first name in the subject and message body

While there's nothing unusual about the product or offer, with 50% market share in online banking, everything Bank of America does at its website is news.

After reviewing my credit card balance online today, I was greeted with a 30-day free trial offer for Bank of America's Privacy Assist Premier, a daily credit-monitoring, three-bureau service priced at $12.99/mo.

Below is the splash screen displayed after logging out from online banking:

We were a bit surprised at the lack of disclosure on this screen; not a single word about the eventual $156 annual cost, to which even the most well-heeled BofA clients may take exception.

Another surprise: Clicking the Accept button simply dropped us back on the home page with not a word of thanks or any confirmation that our selection was accepted.

However, most users will be smart enough to choose Learn More before signing up. On that landing page the cost is well documented appearing in the first bullet point in the shaded box (see below).

Today's Wall Street Journal ran a run-down of identity theft startups. Companies mentioned:

• LifeLock: Founded by Todd Davis, the Chandler, AZ-based firm has been offering its $10/mo service since April 2005. The company also protects children living in the same household for an additional $10 per year. Its plain-language guarantee featured prominently in the upper-right corner of its home page should serve as an example for financial institutions (see inset).
• TrustedID: A Redwood City, CA-based company co-founded in January by former Fair Isaac executive Scott Mitic offers protection services for $7.95/mo.
• CardCops: The Malibu, CA-based firm scans the Internet for stolen information and for $24.95/mo alerts its customers if their data has been compromised.
• Cyveillance: The Arlington, VA firm also sifts through the online world looking for stolen data. The company resells its service as Identity Guard through Intersections Inc.

Financial institutions should be partnering with credit bureaus and/or identity theft providers to provide education and protection services to banking customers. Refer to previous articles here.

-- JB

One day after SunTrust announced free credit monitoring for checking customers (see NetBanker May 8), PayPal launched a similar service for its 50+ million U.S. account holders (see landing page below for details). Both services use Equifax to power alerts based on credit bureau info.

However, SunTrust includes one free look at the customer's credit report. PayPal users would have to pay for that, or sign up separately at <annualcreditreport.com> to see their report free of charge.

While SunTrust bends over backwards trying to upsell users into a more comprehensive fee-based option, PayPal takes the high road, at least initially, simply redirecting users to an Equifax sign-up form devoid of sales pitches (click on screenshot below for closeup).

However, we expect the upsell offers will be along shortly. We'll keep you posted. As a previous Equifax credit-monitoring customer, we've witnessed the company's aggressive email marketing schedule.

--JB

SunTrust launched a new checking account acquisition strategy built around free credit-report monitoring (see personal homepage right). And this is not a low-budget identity-theft "insurance" policy (see PNC Bank, NetBanker Feb. 3 and Washington Mutual, NetBanker, Nov. 7, 2005), but full-blown Equifax Credit Watch Silver costing $6.95/mo or $50/year at the Equifax website.

Credit Watch Silver includes:

• Weekly credit-report inquiry and balance-change alerts
• One initial Equifax credit report.
• $2500 in identity fraud insurance with $250 deductible

How it works
SunTrust is offering the free monitoring on most of its checking accounts, including its standard $9/mo account that is fee-free with a $1500 minimum balance. The free offer is not available to "free checking" or "senior checking" customers. However, they can buy it for a discounted rate of $3.45/mo or $35/year, a substantial discount from the regular price of $6.95/mo.

Of course, customers will have to wade through relatively gentle up-sell pitches for Equifax Credit Watch Gold, which will cost customers $6.95/mo or $70/yr, about one-third less than the list price of $11.95/mo or $100/yr; or Gold with 3-in-1 Monitoring for another $30/yr. Also, customers that want to extend the Equifax Silver coverage to both members of a joint account will have to pony up an additional $35/yr.

Credit Watch Gold includes:

• Daily credit-report inquiry and balance-change alerts
• Unlimited Equifax credit reports
• $20,000 in identity-fraud coverage with