Fraud Alerts, Fraud Reports and Credit Freezes

Three tools that can help you prevent or recover from identity theft are fraud alerts, fraud reports and credit freezes. Fraud alerts can help prevent an identity thief from opening accounts in your name by requesting that potential creditors verify your identification before they extend credit in your name. Fraud reports will block fraudulent information from appearing on your credit report. A credit freeze locks access to your credit file so that no one may open up a new account or get new credit in your name.

Fraud Alerts

If you have been or suspect that you are about to become a victim of identity theft, you will want to put a fraud alert on your credit reports. A fraud alert is an attachment to your credit report that notifies potential creditors to verify your identification before extending credit in your name in case someone is using your information without your consent. Lenders are supposed to contact you by phone to confirm that you really want to open an account and they are not supposed to open any new accounts if they can't reach you. Under the federal Fair Credit Reporting Act (FCRA), the credit reporting agencies are required to provide initial 90-day fraud alerts free of charge at the request of consumers (15 U.S.C. §§ 1681-1681x).

You will need to contact the toll-free number of any one of the three major credit bureau companies listed below to set up a fraud alert. You should only need to contact one of the three companies because the company that you call is required to contact the other two so that they will also place an alert on your report.

• Equifax: 1-800-525-6285
• Experian: 1-888-397-3742)
• TransUnion: 1-800-680-7289

All of these companies follow a standardized four-step process when a consumer asks to set up a fraud alert:

1. The company that you call issues an electronic notification to the other two credit reporting companies
2. Within 24 hours, a fraud alert is put on your credit report at all three credit bureaus
3. You will be opted out or removed from lists for all preapproved offers of credit and insurance for two years
4. Within three business days the credit bureau will process your request for a free copy of your credit report

After you receive your free credit report from each of the three companies, you will want to review them. Look for any suspicious activity, such as accounts you didn't open and charges you didn't make. Get any fraudulent information removed by sending a fraud report to the credit reporting companies.

Under the FCRA, both the credit bureau company and the information provider (the business that sent information to the credit bureau) are responsible for correcting fraudulent information in your report. You will need to contact both the credit bureau and the information provider to get fraudulent information removed. For example, if you noticed a loan payment on your credit report incorrectly marked as late, you would contact both the credit bureau and the lender to have the error removed.

The fraud alert remains on your credit report for 90 days. During the 90-day period you probably will not be able to get instant credit, such as applying for a credit card at a store's checkout counter. You can obtain an extended credit alert, which lasts for seven years, if you provide evidence to a credit bureau that you have been a victim of identity theft. If you decide you want to remove a fraud alert before the expiration date, you will need to request removal in writing and provide information to the credit reporting company to verify your identity.

Fraud Reports

A fraud or identity theft report is a police report that includes enough detail about the crime for the credit reporting companies and the businesses involved to verify that you are a victim. It specifies the accounts that were opened or misused by identity thieves. You should keep the copy of the report that you receive from the police, and have extra copies to send to the credit reporting companies.

When you send a copy of your identity theft report to the credit reporting companies, they will permanently block fraudulent information from appearing on your credit report. Filing an identity theft report with the credit reporting companies or with the companies where the thief used your information should ensure that these debts do not reappear on your credit report.

After accepting your identity theft report, the credit reporting company has four business days to block the fraudulent information. It also must tell the information provider or creditor that it has blocked the information.

Credit Freezes

A credit freeze may be the most effective way to prevent identity theft. A credit freeze locks access to your credit files so that no one may open up a new account or get new credit in your name. It locks the data at the credit reporting agencies until an individual gives permission for the release of the data. All three credit bureaus allow consumers to freeze their credit reports.

The credit bureaus do charge you to place a freeze on your credit reports and you will need to contact each company separately. There is also a charge to unfreeze your account, which you will need to do if you want to apply for credit. You won't be able to get a credit card, car loan or mortgage until you unfreeze your credit reports, and you may need to wait up to three days to get all of your credit reports unfrozen.

To unfreeze your credit report files, you will need to provide the following information to the credit reporting agency:

• Sufficient identification to verify your identity
• Your personal identification number or password that the credit reporting company previously provided to you
• A statement that you choose to remove the security freeze from your file or that you authorize the reporting agency to temporarily release your consumer report to a named person or for a specified time period

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