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What is a Fraud Alert?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 26 October 2016
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A fraud alert is a notice attached to someone's credit report which indicates that he or she has been or might be a victim of identity theft. Fraud alerts are placed by request from people who want to notify creditors to exercise caution when opening new accounts in their names. They can be used as a tool to reduce the risk of identity theft and to prevent additional incidences of identity theft, and they do not negatively impact someone's credit.

Someone who thinks that he or she might be at risk of identity theft should request a fraud alert. Some things which might put someone at risk include: stolen mail, a missing or stolen wallet, or a phishing scam. By putting in a fraud alert, the consumer will ensure that any companies asked to open accounts in the consumer's name will exercise special diligence to confirm that these accounts are legitimate. Once someone has become a victim, placing a fraud alert notifies companies that some of the activity on the credit report may be fraudulent and in dispute, and it ensures that special care will be taken by companies opening new accounts in the name of the consumer.

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People can place a fraud alert by calling any one of the three major credit bureaus and requesting one. The representative will ask for some information to verify the identity of the caller, to confirm that he or she is authorized to place a fraud alert. Then, that official will notify the other two credit bureaus so that they can place fraud alerts as well. Once a fraud alert is placed, it lasts for 90 days, and the consumer may order one free report from each bureau to look for fraudulent activity.

An extended fraud alert lasts for seven years. This option usually requires proof that someone has been a victim of identity theft, such as a police report. Many credit bureaus also offer deployment fraud alerts to members of the military so that they cannot be made victims of identity theft while they are on active duty.

Another option is a credit freeze, which restricts authorized access to someone's credit report. When a credit freeze is used, the consumer must lift it for companies to have access to the credit report when he or she applies for credit, and someone attempting to use that consumer's information to create a fraudulent account will not be able to lift the freeze, which will result in a denial of credit.

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