What is a Fraud Alert?
A Fraud Alert is a notification, a security statement if you will, attached to your credit file. Once you place a fraud alert in your file, any potential lender must take every reasonable step to verify your identity before extending any credit to you or anyone else applying for credit using your name. Therefore, make sure you include your phone number (cell phone number is the best option) in your statement.
How does it work?
If you have reasons to believe you have been a victim of Identity theft or fraud or suspect you are about to become a victim of this crime (lost or stolen wallet, fallen prey to a “phishing” scam, security breach notification, etc.), one of the very first steps you can take is to place an Initial Fraud alert in your credit file which stays there for 90 days and can be renewed when it expires. When you place an Initial Fraud Alert in your file, you are entitled to a free copy of your credit report from each credit-reporting agency in addition to a free copy that you get through www.annualcreditreport.com. Your name is also removed from all pre-approved credit card and insurance offers.
If you are a victim of Identity Theft, you can request an Extended Fraud alert to be placed in your file, which stays there for up to 7 years. When you place an Extended Fraud Alert in your file, you are entitled to two credit reports from each credit-reporting agency in the span of 12 months (one in six months) for the first year. Depending on the state, you may be entitled to more free copies of your credit reports. For example, in California, you can request a free copy of your report once a month (that is 12 reports!) for the first year. Also, your name is automatically “opted-out” of all pre-approved credit card and insurance offers for 5 years.
If you are on active military duty, you may place an Active Duty Alert in your file. It is very similar to an Initial Fraud alert, but instead of 90 days, it stays on your report for 12 months and your name is removed from prescreened credit card and insurance offers for 2 years.
How do I place a Fraud Alert?
If you are placing an Initial Fraud Alert or an Active Duty Alert in your file, you may do so by calling, or online, or by mail. You only have to contact one credit-reporting agency. The agency you contact is supposed to communicate that information with the other agencies.
A request for an Extended Fraud Alert must be made in writing. You will have to provide credit reporting agencies with a copy of your Identity Theft Report or a police report and a sufficient proof of your identity, which may include your Social Security Card, paycheck stub, Driver’s License, etc.
Consumer Fraud Division
P.O. Box 740241
Atlanta, GA 30374-0241
Experian's National Consumer Assistance
P.O. Box 2104
Allen, TX 75013
P.O. Box 6790
Fullerton, CA 92834
Attn: Consumer Assistance
P.O. Box 26
Pittsburgh, PA 15230-0026
Things to consider…
- Although the credit-reporting agency you contact and place a fraud alert with should share that information with other the agencies, it does not always happen. It is recommended to contact all of them.
- Placing a Fraud Alert in your credit file is not a cure for all. In theory, any potential lender should take steps to verify your identity; the reality is they do not. I am speaking from my own experience. A Fraud Alert was supposed to be a tool to protect a consumer from Identity Thieves opening new credit card accounts, lines of credit, etc. However, it just seems it is not even taken seriously.
- Having a Fraud Alert in your file may raise some red flags and it could be considered as a risk factor. Some businesses instruct their employees not to extend credit to the individuals with Fraud Alerts on their files. They feel that an Identity Theft Victim may dispute charges later on.
- If you have a Fraud Alert placed in your file, you will not be able to obtain a free copy of your credit report through www.annualcreditreport.com online or by calling. You must do so in writing and send it by mail.
Still, having a Fraud Alert placed in my file, gives me some sense of security. Despite the fact that the businesses do not always follow through, it is always a good idea to exercise your right to place a Fraud Alert when you are a victim of ID theft or when you have good reasons to believe you are.