Credit bureau Experian (search) has settled charges that it used free credit reports to deceive consumers into registering for a subscription credit monitoring service, the U.S. Federal Trade Commission said on Tuesday.

Experian, a unit of British retail and financial services group GUS Plc, has agreed to refund deceived consumers and give up $950,000 in ill-gotten gains, the FTC said.

The FTC (search) had complained that Experian promised free credit reports without adequately disclosing that consumers would automatically be signed up for a credit monitoring service and charged $79.95 if they failed to cancel within 30 days.

According to the FTC, Experian drove consumers to their www.freecreditreport.com and www.consumerinfo.com Web sites with radio, television, e-mail and Internet ads that promised free credit reports and bonus free trials of the credit-monitoring service.

Consumers were required to provide detailed personal information and valid credit card account numbers to get their credit reports. The FTC says it is not known how many people were duped.

Under the settlement, Experian is also barred from deceptive and misleading claims about "free" offers and must disclose terms of its offers.

"It's unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn't want in the first place," Lydia Parnes, director of the FTC's Bureau of Consumer Protection, said in a statement.

Reuters and The Associated Press contributed to this report.