The Warybuyer Guide to Credit Report Fraud Alerts

Credit Reporting Agencies are now required to implement a fraud alert reporting procedure. A fraud alert is a notice to any person who receives a credit report that the consumer does not wish credit to be granted except under certain circumstances. There are different types of fraud alerts: an Initial Fraud Alert, an Extended Fraud Alert, and another type of alert for active duty military personnel. Each type of alert differs in the effect upon creditors and duration.

Initial Fraud Alert

An initial fraud alert is easy to put into your credit report. You can contact the credit reporting agency by phone and you need only tell the agency that you have a suspicion that you are or are about to be the victim of fraud or identity theft. The agency must then alert each creditor who receives your credit report or credit score that you don’t authorize any request for the opening of a new account, issuance of a new credit card, or an increase in a credit limit unless the creditor takes reasonable measures to ensure that the request is actually authorized. If you provide a telephone number with the alert, the creditor may call you to obtain verbal authorization, but may choose not to if it uses some other reasonable method to verify that the request is from you and not an identity thief. An initial fraud alert lasts 90 days, but you can terminate it earlier than that if you wish. Although you can contact the credit reporting agency by phone for an initial alert, you should confirm your request in a letter mailed by certified mail, return receipt requested.

Extended Fraud Alert

An extended fraud alert is more difficult to obtain, but provides more effective protection than an initial alert. The law is somewhat vague about what you must do to put an extended alert into your credit report. At a minimum, you must submit a copy of a report to a law enforcement agency that clearly identifies you and provides as much specific detail as possible about the identity theft. If the credit reporting agency is suspicious about the report you submit, it may request additional information from you. Once the credit reporting agency has accepted the alert, it must convey the alert to each creditor who receives your report or score. The alert provided is essentially the same as the initial alert, except that the creditor who receives an extended alert must contact you at the telephone number provided in the alert before opening a new account, issuing a new card or increasing your credit limit. The creditor cannot rely upon other procedures for confirming your identity as is the case with the initial alert. An extended fraud alert lasts 7 years, but you can terminate it earlier than that if you wish. The extended alert also automatically excludes you from being included in pre-screened mailing lists sold by credit reporting agencies to creditors who want to solicit new accounts for a period of 5 years.

Military Alert

The military alert is similar to the initial alert in that it can be easily obtained by any person on active military duty or that person’s representative, and the requirements on creditors who receive the alert are the same less strict requiremments applicable to initial alerts. It lasts for a year, longer than an initial alert, and it removes you from pre-screened mailing lists for 2 years. As with the other alerts, you can end it early if you want.

One Call Procedure

Each of the 3 major credit reporting agencies is required to notify the other 2 when it inserts a fraud alert into your report and they are supposed to also insert the same fraud alert. I don’t recommend relying on this procedure. Send a copy of your fraud alert request to each of the three agencies. By doing so you avoid a dispute over who is responsible for failing to send an alert to a creditor in the event of a future identity theft.

Free Credit Report

When you place a fraud alert on your credit report, you are entitled to a free credit report. If the fraud alert is an extended fraud alert, you are entitled to 2 free credit reports during the first year of the alert. There is no free credit report benefit for military alerts.