What is a Fraud Alert?
Having a Fraud Alert on your credit report is a way to notify creditors and lenders to put additional security measures to verify your identity before they can extend a loan or a credit line in your name.
This action is taken to prevent a thief from opening an account in your name.
This reduces the chances of one becoming and identity theft victim.
According to Fair Credit Reporting act, all customers have the right to place Fraud Alerts on their credit card reports with the three major credit bureau, free of charge.
Once one has put the fraud alert on their credit report, the bureau is mandated to notify other two credit bureaus to place them on their alert file. There are three types of fraud alerts:
1. One Time Fraud Alert
Is a request that a customer has been or is about to become a victim of fraud or any crime.
Or, a customer acting on behalf of themselves as described in section 1681 a (p) of the customer Reporting Agency states that the identity of the requester shall:
“Include, in the file of that customer a fraud alert and provide any credit score generated using that file for a period that is not less than 90 days beginning on the day of request, unless the request is removed before the end of this period and appropriate identification has been provided for such purpose.”
2. Extended Alerts
Upon the request of a consumer, an individual acting on behalf of the consumer and submits an identity theft report to the Consumer Reporting Agency as described in section 1681 a (p). If the agency has received appropriate proof of identity and the file of the consumer, the agency shall:
– Include the alert of fraud on the file of that consumer and provide appropriate alerts and the credit score generated using that file for a period of 7 years beginning on the day of request unless the consumer or the representative requests the removal of such fraud alerts before the end of the period after receiving appropriate identification of the requester for such purpose.
– The consumer shall be excluded from any list of consumers prepared by the agency to receive any credit or insurance to the consumer during the first 5 years of issuing the fraud alert unless the consumer requests that such exclusion be rescinded before the period ends
3. Active Duty Military Act
Upon request of an active duty military consumer or representatives acting on their behalf as described in section 1681 a (p) of the Consumer reporting agency, the requester shall:
– Include an active duty alert in the files of the active duty consumer along with credit scores generated from the file during a period that is not less than 12 months or longer as the bureau shall determine unless the representative of the active duty consumer requests the removal of such fraud alerts before the end of this period.
Sources
- https://www.law.cornell.edu/uscode/text/15/1681c-1
- https://en.wikipedia.org/wiki/Fair_and_Accurate_Credit_Transactions_Act
- http://www.consumerfinance.gov/askcfpb/1375/i-may-have-been-victim-fraud-or-identity-theft-how-can-i-put-fraud-alert-my-credit-report.html
