Fraud is a growing concern all over the world. According to the Bureau of Justice Statistics, 7 percent of people over the age of 16 were victims of identity theft in 2013.
This is an astonishing figure and one that should have every consumer worried. When you are a victim of identity theft, not only is a person posing as you, they are also ruining your credit score and causing you to fall deep into debt without you even realizing it.
This is what a fraud alert attempts to circumvent.
These alerts will send out a notice that alerts you when you may be a victim of fraud.
What Can A Fraud Alert Provide?
A fraud alert is an alert that is put onto your credit report. What occurs is that a person cannot open a new credit card under your name in the event that an alert is in place. This is a safeguard that allows you to put an end to someone misusing your identity for their own financial gain. A good example of this would be,
A person finds your wallet on the side of the road. This person now has your information and can apply for credit cards under your name. The approval of these cards will never be sent to you, but to another address, or they may be issued directly online.
In the example above, you would be the victim of fraud. Another individual would now be accruing debt in your name and has effectively stolen your identity. While you may call credit card companies to have your cards cancelled or re-issued, this does not stop a person from using your information to open up new credit cards. The biggest issue is that loans, or credit, will be taken out under your name without your knowledge.
An alert will be able to put an end to this quickly. Essentially, these alerts will protect you in the event credit is taken out in your name. Before any credit can be issued, within 90 days of the alert being put in place, the issuer must confirm that the person applying for credit is you. This may mean that they will contact you by phone or mail at your current address. This helps a consumer safeguard their current credit so that they do not have to worry about fraud occurring. However, these alerts are only valid for a maximum of 90 days. The alert can be reissued every 90 days, but must be done by you to ensure that alerts are still in place.
What Companies Provide Fraud Alerts For Consumers?
There are three major credit bureaus that are able to be contacted to put an alert on your credit. These companies include:
- Equifax
- Experian
- TransUnion
These three companies are responsible for tracking your credit history. Every time you open a line of credit, or take out a loan, these companies are notified. While this is done to ensure that a proper credit history is held under your identity, it is also a way to help lenders safeguard themselves from individuals that do not repay their loan. This, however, can also help you if you want to get a mortgage or when you have become a victim of identity theft.
Setting Up Alerts
Alerts are very easy to setup and will not be more than a phone call away. In fact, the credit reporting companies mentioned above will assist you when an alert must be placed. To initially setup your alert, you must follow these steps:
- Contact one of the credit agencies above. Once one agency is notified, they will need to notify the other 2 agencies on your behalf.
- Ask the representative for an initial alert to be placed on your report. They will ask you to divulge your personal information, such as your name, date of birth and social security number.
- Once verified, an alert will be placed on your identity.
These alerts will now make it much harder for a person to open any form of credit under your name. Before a lender can issue credit to you, they will now need to verify that you are the person requesting credit.
It is essential that your contact information is up-to-date with all three of the respective credit bureaus. If your information is not current, they will not able to provide a proper fraud alert. This can be done by visiting each company’s website and opening a free account. Once verified, you will be able to enter in your current information. It may also be possible to request an information change on the phone, but you will be asked to prove your identity.
Once an alert has been placed, it will stay on your account for at least 90 days. If the person that is using your identity has not been identified, it is wise to renew the alert. A free credit report is also available from all three agencies and should be inquired about once an alert has been placed. Through this report, you will be able to verify all open loans and credit to ensure that each was opened by you.
What to do When an Alert is Received
Once an alert has been setup, you must take action to further protect your identity. This means that you will need to call all of your current lenders and ensure that they are updated with your current information. Any open loans or credit lines will also need to be adjusted. Oftentimes, new credit cards will be reissued so that you do not have to worry about the person using your current credit card information.
Fraud and identity theft are very big concerns and trying to resolve the issue is a very timely matter. Any lenders that are listed on your credit report must be contacted. You will need to explain the situation, record the date and time of the call as well as the representative’s name to ensure that you have records in place to safeguard yourself.
Certified letters should also be sent to each lender after the initial call to have further proof of contact. This is done to provide information to the lender that is now verifiable. Now, continuous monitoring of your credit report and alerts will need to be done to ensure that you are no longer a victim of identity theft.