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Wednesday, June 19, 2024   
Fraud Alerts and Fraud Freezes
by Andy Jolls
Andy Jolls
Andy Jolls is the CEO and founder of VideoCreditScore.com. With topics that range from the Credit Score 101 to tips on Identity Theft, VideoCreditScore.com provides a simple way to learn about a complex subject. An alternative to reading volumes of pages in books or on the web, consumers can simply access short segment videos whenever and wherever they want.
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First, what is a Fraud Alert?

An alert places a statement on your credit report so that if a fraudster attempts to obtain credit in your name, the creditor, in checking your credit, will encounter a statement that says something to this effect: “I may be a victim of fraud. Call me at my phone number 312-555-7890 before extending credit.” By calling you, the creditor ensures more security.

There are two types of Fraud Alerts

The first and much more common is a 90-day fraud alert. This is for someone who “suspects” they have been an id theft victim, but doesn’t know for sure.

So, I setup a 90-day alert a few weeks ago, and here’s how it impacted me. When I went to switch cell phone carriers, instead of the normal online credit check they usually do--yes, your credit score is checked when you apply for a cell phone plan (did you know this?)--they tried to call my contact number to verify it was me. So my old cell phone rang, and then I was able to verify over the phone that, yes, it was me trying to order a new plan. My visit to the cell store was longer, but it was a lot safer.

As I was just suspicious that I was a victim of ID theft, just a few weeks earlier, I got the 90-day alert.

To set this up, call any of the 3 bureaus. Equifax’s number is 1-800-685-1111--select option 4. Or go to www.equifax.com. Again, you can call any of the bureaus, I just liked the Equifax automated system.

The second type is a 7-year alert and this for people who MUST prove to the Credit Bureaus that they were victims of ID theft by providing documentation from their credit card companies or other financial institutions. A good idea, if you’ve been a victim.

Finally, there’s something called a Fraud Freeze or Credit Freeze, which is available by law or on a volunteer basis by the bureaus in all 50 states and Puerto Rico.

So what is it?

A security freeze means that your credit file cannot be shared with potential creditors or insurance companies; it can help prevent identity theft since most businesses will not open credit accounts without checking a consumer’s credit history first; Once your account is frozen, credit cannot be granted until you unfreeze it. So, remember my cell phone story a moment ago? If I had a fraud freeze in place, I would not receive a call and credit would have simply been denied. So, it’s more protective than a Fraud Alert.

ID theft victims can list for free in most states but ‘non-victim’ consumers will pay $10/bureau to set it up and $10 each time they need to unfreeze it. In most cases, you have to send your requests by certified mail. Click on the link under resources to find out more specifics with your state.

If you are past the credit needing age, and not likely to need credit for anything, you may want to do a credit freeze. Okay, this isn’t right for most of us, but it might be for your parents, or your aunt or uncle. The elderly are common targets of ID theft as they often have great credit scores and aren’t checking accounts as frequently.

Fraud alerts and fraud freezes are not 100 percent fail-safe, as some creditors can and will issue credit without pulling a credit report. But they are effective as most financial institutions use credit checking to protect themselves. And that, in the end, protects you better.

Okay let’s recap. There are three types of protective measures: the 90-day alert, the 7-year alert, and the Fraud Freeze. The Fraud Alerts are Free and provide an extra layer of security. The 7-yr fraud alert will only be placed with Proof that you were a victim, whereas the 90-day alert can be placed by anyone merely suspicious of fraud. The Fraud Freeze is more protective and costs $10 to setup and $10 to unfreeze for each bureau. A good idea if you don’t need a loan, credit card, or new cell phone plan in the near future.


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