- fraud alerts and credit freezes are effective tools in preventing some forms of identity theft . However, many consumers do not understand the differences between the two and how to go about setting up a fraud alert or credit freeze on their credit file.
We have compiled detailed information on fraud alerts and credit freezes below as part of our ongoing effort to educate consumers about the best ways to help protect against risk identity theft courses.
Fraud Alerts
fraud alerts are annotations in a credit report that enable potential lenders know they must take additional steps to confirm identity before issuing credit in your name. There are two types of fraud alerts:
1) Initial Fraud Alert . An alert to the initial fraud is intended to be a temporary marker on your credit report and lasts 90 days from the time you set the alarm. When a lender runs your credit report and see that there is a fraud alert in place, they are legally obliged to use reasonable policies and procedures ?? to verify that the person applying for credit in your name is actually you.
initial fraud alerts are a good option for consumers who believe they are at risk for what is called a new account fraud. This is where a criminal uses your personal information to sign up for new financial accounts such as credit cards, bank accounts, cell phone providers or any other service that can pull a credit report and a few extend to the credit.
Keep in mind, however, initial fraud alerts provide little or no protection for other forms of identity theft. For example, an initial fraud alert will not prevent an identity thief from accessing your existing financial accounts and make unauthorized charges or liquidate your financial accounts. We recall this because some experts initial fraud alerts as a magic bullet to prevent identity theft that can give some consumers a false sense of security. If you think your existing accounts may be at risk of identity theft, so it's a good idea to contact the institutions with whom you have accounts directly and let them know the risk. Some of identity theft protection services that we reviewed also help notify your bank, credit card company or other institutions on your behalf.
Setting an initial fraud alert requires contact one of the three credit bureaus and request the fraud alert be set. Technically, you should define the fraud alert with only one of the three major credit bureaus including Equifax, Experian or TransUnion. However, if you think you might be at risk of identity theft or just an extra level of protection against identity theft fraud of the new account, we suggest setting fraud alerts with the three offices using the contact details below.
Equifax
1-800-525-6285
www.equifax.com
PO Box 740 241
Atlanta, GA 30374-0241
Experian
1-888-EXPERIAN (397-3742)
www.experian.com
PO Box 9532
Allen, TX 75013
TransUnion
1-800-680-7289
www.transunion.com
Division of assistance to victims of fraud
PO Box 6790
Fullerton, CA 92834-6790
initial fraud alerts are free to set and can be renewed every 90 days. LifeLock, one of identity theft protection services that we examined in our protection service comparison against identity theft, protects and renews the initial fraud alerts to their subscribers. The do-it-yourselfer can be fine with setting and keeping up with the renewals initial fraud alert, but if you believe that the process can be cumbersome or you may not have time to do it then can LifeLock be a good option for you.
2) Extended Fraud Alert . While a warning to the initial fraud remains active for a relatively short period of 90 days, an extended fraud alert stays on your credit report for seven years. Also, if you have an extended fraud alert on your credit file from a potential lender is required to contact you or you actually meet face to face to verify your identity before providing credit in your name.
In order to qualify for an extended fraud alert, you generally demonstrate a high probability that you have or will be a victim of identity theft. This usually means showing inconsistencies in your credit report or other proof that you are at risk of being victims. As such, the extended fraud alert layout is slightly more complex than the initial fraud alert layout.
The first step in the extended fraud alert layout is filing an identity theft complaint with both the Federal Trade Commission (FTC) and your enforcement agency local law. The FTC has an online identity theft complaint form that can be submitted securely over the Internet and then printed so that it can be provided to your enforcement agency local law.
Take identity theft complaint with your local police or other law enforcement agency to file a report. In addition to your completed complaint, you will also need to provide your local authority with a government issued picture ID (such as driver's license or identity card), something with your name and address on it that will set your place of residence (such as a project utility bill, pay stub or lease), a copy of your report (s credit) that shows the inaccuracies that you believe may have been caused by identity thieves and other supporting documentation, including information about the identity thief if available.
enforcement agency Your local law review your information and, if warranted, provide a copy of the official police report. make sure that this report includes or is attached to your identity theft complaint.
Once you have received the official police report your identity theft incident you are ready to take the next step of the extended fraud alert layout that notifies the three main offices credit. Send a copy of your police report, the complaint identity theft, all supporting documents and a brief cover letter requesting an extended fraud alert be set on your credit report. You can send information to each of the credit bureaus using the addresses below. You can also call or visit their website if you have questions about how to proceed.
Equifax
1-800-525-6285
www.equifax.com
PO Box 740 241
Atlanta, GA 30374-0241
Experian
1-888-EXPERIAN (397-3742)
www.experian.com
PO Box 9532
Allen, TX 75013
TransUnion
1-800-680-7289
www.transunion.com
Division of assistance to victims of fraud
PO Box 6790
Fullerton, CA 92834-6790
once you have sent your application to extended fraud alert and documentation to the three major credit bureaus, they will review the information and inform you whether you know that the extended fraud alert has been fixed or to request additional information. The FTC strongly suggest that you send your identity theft of documentation relating to fraud services of one of the companies where you hold accounts, or where accounts have been opened in your name, you think you have been affected or may be affected as a result of your alleged crime of identity theft.
The contacting process of each company varies. It is best to contact their customer support department for more information on how to contact their fraud prevention team.
Once an extended fraud alert is set, it will be active on your credit report for seven years. It is possible to delete an extended fraud alert before its expiration by making a written request to each of the three credit bureaus.
Given the time and effort required to define an extended fraud alert, we suggest that consumers who have seen specific inconsistencies in their credit report or other evidence that they are at imminent risk for identity theft opt for the set up. Consumers who feel their is a potential risk because they were part of a data breach, for example, or are looking for an additional layer of preventive protection would be preferable to use an initial fraud alert . Initial fraud alerts can be defined by the individual or by means of a protection service against identity theft such as LifeLock.
Credit Freezes
freezes credit lock your credit report so that you alone or businesses where you have a pre-existing relationship may access it. No new lenders will be able to access your credit file at any one credit freeze is in place. This means that even if you try to legitimately apply credit in your name with a new lender, they will not be able to access your credit information. It is possible for an extra fee, to temporarily remove a credit freeze if you need to allow a new lender to access your credit report for any reason.
credit gels are extremely effective tools to prevent the new type of identity theft fraud account because they essentially take your credit report "off-market". They are also a good tool for seniors or others who do not expect the need for a new credit in the foreseeable future since the credit freeze eliminate the risk of new accounts being opened fraudulently. As fraud alerts, however, credit freezes are not effective in preventing fraud account and do little or nothing to prevent identity theft perpetrated against existing accounts or accounts where a credit is not used to issue credit (which is the case with some utility or cell phone bills).
The process of fixing a credit freeze varies considerably from state to state. For example, most states allow anyone to define a credit freeze while others require that the consumer is able to prove that they are at risk of identity theft before it can be resolved. Consumer Reports offers and excellent guide for credit freeze laws by the state that includes information on how to set the gel. You can view this guide here.
Generally, setting a credit freeze requires contact the three major credit bureaus, Experian, Equifax and TransUnion, and pay a fee for each about $ 10. The credit freeze will remain in effect until it is removed or temporarily lifted. If you set a credit freeze and you want to remove temporarily, you will need to apply to each of the three credit bureaus and pay an additional fee to each for the gel up. You need to contact each of the credit bureaus to reset it. A credit freeze can be permanently deleted by applying to each of the three credit bureaus.
TrustedID, one of identity theft protection services that we examined, is the only service that we found that allows consumers to define credit gels with all three credit bureaus on the Internet. As a subscriber to TrustedID service, you can configure and manage your credit gels TrustedID via your account. We see this as a major benefit and convenience for any consumer who feels a credit freeze is good for them.
Credit freezes are really only realistic for consumers who know they are actively victims or in imminent danger of identity theft or for people who have not need additional credit in the foreseeable future.
Conclusion
If you are at risk of identity theft or actual victim, the choice whether to set an initial fraud alert, alert fraud or prolonged credit freeze greatly depend on your personal circumstances.
initial fraud alerts are fairly easy to install and maintain way to get a good layer of protection for the new account fraud. They are relatively easy to establish yourself or can be managed by third party identity protection services against theft, such as LifeLock. While initial fraud alerts add an extra layer of complexity when trying to obtain legitimate new credit in your name, they are discreet enough to be kept in place for long periods of time. Although, admittedly, this is not their intended use.
The credit bureaus would probably prefer that victims of identity theft just put initial fraud alerts because there is the potential risk that lenders could stop taking the initial fraud alerts seriously if too many consumers have on their credit reports. That said, it is for each person to determine if they feel they need this type of protection. Some people may believe, given the explosive growth of identity theft in this country, that any consumer could reasonably be at risk of identity theft at any time. LifeLock is a protection service against identity theft which defines and manages the initial fraud alerts on behalf of their subscribers.
extended fraud alerts are a further level of protection above the initial fraud alerts. They are best suited for those who are either victims or saw inconsistencies in their credit report that lead them to believe they may be victims of new account identity theft. extended fraud alerts are a better option than credit gels for consumers who believe they have an imminent need to legitimately secure credit lenders in the future because they do not completely lock out access to your credit report by hardliners.
credit gels are most effective for consumers who believe they are currently experiencing or at risk of new account fraud and do not believe they will need to get the credit lenders in future predictable. The elderly, many of which may not need additional credit in the future, are a good example of a population that could benefit from the use of credit gels. TrustedID is a protection service against identity theft which allows consumers to configure and manage online credit gels.
It is important to remember that one of these solutions are only effective in preventing certain types of identity theft, including a new account fraud. We recommend that consumers obtain information on identity theft and identity theft prevention techniques by reading the Web site of the prevention of identity theft FTC. In addition, those interested in learning more about identity theft prevention services should read our guide to identity theft protection services.
Finally, remember that identity thieves are increasingly targeting children. Read our guide to the identity of children protection against theft for more information on backing up your children against identity thieves.