Consumer Law

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.

Do these things immediately. Once a thief has your information, they may wait for several months or attempt to open account immediately. The sooner you take steps to protect yourself, the sooner you're on the road to getting your life back on tracks.

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).

The Fair Credit Reporting Act (FCRA) section (15 U.S.C. §§ 1681-1681x) requires credit reporting agencies to provide free initial 90-day fraud alerts. Contact one of the companies listed below and they'll contact the others to place an alert on your file.

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

  1. An electronic notification is sent to the other credit reporting companies
  2. Within 24 hours, a fraud alert is put on your credit report at all three credit bureaus
  3. You'll be removed from lists for all pre-approved 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 all three companies, you'll 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. 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 won't 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, 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 details about the crime for the credit reporting companies and the businesses involved to verify that you're a victim. It specifies the accounts that were opened or misused by identity thieves. Keep the copy of the report and have extras to send to the credit reporting companies and other places you need to clean up the theft.

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. This locks access to your credit files so that no one may open up a new account or get new credit in your name. The data is locked 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 may charge you to place a freeze on your credit reports and you will need to contact each company separately. There may also 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

Questions for Your Attorney

  • How do I file a fraud or identity theft report?
  • What should I do if I want to apply for credit or insurance, but there has been a fraud alert because an identity thief stole my information?
  • How will I know if it is safe for me to unfreeze my credit report?
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