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Debunking The Myth Behind Fraud Alerts
Posted on Jan 24, 2007 by Tom Fragala
Don't get fooled into thinking that fraud alerts provide you much protection from identity theft. THEY DO NOT. Here's a question I got from someone today and my response.
This might be a dumb question, but why not just post a "fraud alert" with one of the credit bureaus (who I understand must alert the other two). Then just keep extending it. Wouldn't this stop the identify thief in his/her tracks? They may have your identity, but they would not be able to use it to open any new credit, apply for jobs, rent apartments, open utility accounts, etc. I think you can do the something similar with the Dept. of Motor Vehicles to prevent them from issuing a replacement drivers license. Seems like this approach might work as long as you are fairly stable and not moving around a lot or applying for new credit. Any thoughts?
Fraud alerts do not shut off your credit file in any way shape or form. A fraud alert is just a notation on your credit file that you were a victim. Creditors or anyone else checking your report are not required or compelled to even pay heed. They don't stop anything. Now, a number of respectable creditors do require validation on things like instant store credit if you have a fraud alert. They are better than nothing and can help stop some identity thieves from opening new credit in your name. You are probably thinking of a credit or security "freeze". That is very different. Freezes are not available in all states and are not right for everyone.
As far as extending an alert, as you know, the first fraud alert (by phone) stays in place for 90 days. With one letter to each CRA, you can request an extended fraud alert which lasts for 7 years. You don't need to keep renewing it every 90 days.
And by the way, alerts and freezes only protect you from identity theft related to your credit file. There are plenty of other ways someone can use your identity for nefarious purposes. Alerts and freezes alone do NOT make you fully safe. They can make you safER. Any person or company that tells you fraud alerts will shut down identity thieves does not know what they are talking about. Ignore them because they know enough to be dangerous.
Here's a blog post I wrote about this issue:
Filed under: Credit, Identity Theft, Tips
Tags: credit file, credit report, fraud alert, identitytheft, idtheft
Comments
Hardas K Kripalani on Jan 25, 2007
I fully agree with you. The fact that these cumbersome tools exist for some slight protection against identity theft only provide an impertinent and irresponsible excuse to those who provide instant credit with wanton negligence that the identity theft victim had not availed of the available tools for protection.
aprpeh on Jan 26, 2007
Hi Tom. One point of clarification - the 7 year fraud statement requires an "identity theft report". The consumer must mail this report, along with a copy of a driver's license or state issued ID and proof of residence along with the Id Theft Report and request to the credit bureaus. The Id theft report usually means a police report but could be an FTC ID Theft Affidavit. Of course, all consumers are entitled to use their 100 word or less consumer statement and "create" an extended fraud alert the old fashioned way we used to do before FACTA.
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That's absolutely correct. Thanks for pointing it out. I didn't explain that detail in this post, but I did in others including this one: http://www.mytruston.com/blog/credit/how_to_get_four_free_credit_re.html
--Tom, Truston
Lori Lamb on Apr 2, 2007
I fully agree with you. I have worked in the credit card industry for the past 14 years. I can tell you from the front lines that these poor people, who have placed the alert 90 days or 7 years, get a quick glance at the message by the credit analyst, then it is released for approval if the applicant has photo id (which may be stolen.) If you are a victim of Id theft, the Freeze is the way to go if provided in your state, as you can freeze an thaw as needed. you have the control. But the Affidavit needs to be sent to any and all agencies outside the credit world. SSA, DMV, Bank, IRS et...
Jack Payne on Jun 16, 2007
The fact that these fraud alerts are voluntary on the part of the credit bureaus should tell you the full story.
--Jack Payne
www.sixhrs.com
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