What Is a Fraud Alert?
When a person suspects that his personal information has been compromised or has been a victim of identity theft he can place a fraud alert on your credit report. A fraud alert on the credit report is notification to any creditor accessing your credit report that he needs to a fight identity of the person applying for credit. A fraud alert is a notification that requires a creditor by law to take extra measures to check the identity of the person which may involve asking for additional proof of identity and calling the consumer.
Two Major Types of Fraud Alerts
The primary fraud alert can be placed by person who suspects that his identity has been stolen and can be used to commit fraud. This kind of an alert can be placed by writing to the credit bureaus by mail or over the telephone and lasts for a period of 90 days. The second kind of a fraud alert is an extended fraud alert and is applicable to the consumer who has been made a victim of identity theft. A person who has been a victim of identity theft will need to send an application for a fraud alert in written and provide a report of identity theft which could be a police report, identity theft report or DMV report. The extended fraud alert lasts for a period of seven years to the time that the person removes the fraud alert from the credit report.
While a fraud alert is helpful in preventing identity theft it is not 100% foolproof. First of all a fraud alert will not prevent you from identity theft. If you have place an initial fraud alert a cluster period of 90 days and the thief might try to steal your identity and open a new account after the alert has subsided. An identity thief could also use the stolen information to open accounts or you services that do not require a credit check such as telephone or utility services. In these cases a fraud alert on your credit report will not prevent fraudulent transactions being made based on a stolen financial information.
The effectiveness of a fraud alert on a credit report is dependent upon a business or a creditor doing a proper check to confirm the identity. Human error could result in the thief getting away even though the fraud alert on the credit report is in place.
Another alternative to a fraud alert is putting a security freeze on your credit report which will prevent creditor from checking your credit report and new accounts from being opened is that require the creditor to check your credit report from either of the three main credit bureaus. However even a security freeze is not foolproof percent recent that’s the thief can still open accounts and try and you services in your name that don’t require a credit check.