Credit Fraud Alert

A credit fraud alert is a consumer-initiated notice added to a credit file. Under the Fair Credit Reporting Act, when a fraud alert is active, a business that receives a consumer report must take reasonable steps to verify the identity of the person applying for credit. The alert does not prevent a business from accessing the report, nor does it remove or alter any information in the report. It is a procedural flag that signals that the consumer may be a victim of fraud or identity theft. The alert is not a credit score, a credit rating, or a statement about creditworthiness. There are several types. A standard fraud alert generally lasts one year and may be renewed. An extended fraud alert lasts seven years and is available to consumers who provide an identity theft report, such as a report filed with the Federal Trade Commission or a police report. An active duty alert is available to members of the military on active duty and generally lasts one year, with the option to designate a personal representative to handle credit matters. A consumer may request a fraud alert by contacting any one of the three national credit reporting companies (Equifax, Experian, and TransUnion). The company that receives the request must notify the other two, and the alert is then placed on files at all three. Fraud alerts are free. A fraud alert differs from a credit freeze, also known as a security freeze. A credit freeze restricts access to a consumer report more broadly and must be requested separately from each of the three national credit reporting companies. A fraud alert does not block access; it prompts verification. A fraud alert also differs from a credit lock, which is a product some companies offer and which is governed by contract rather than by the FCRA. A fraud alert does not affect a credit score directly, though the underlying report and any new accounts resulting from fraud may. The alert itself is simply a notice. When a fraud alert is active, a lender or other user of the report is expected to verify the consumer's identity, often by contacting the consumer at a phone number the consumer provided. If the consumer does not recognize an inquiry or account, they can file an identity theft report and request an extended fraud alert. The alert can be removed by the consumer at any time. Placing a fraud alert does not prevent every fraudulent account from being opened, and it does not replace a review of credit reports for inaccuracies. Consumers can obtain free credit reports from annualcreditreport.com and can learn more from the Consumer Financial Protection Bureau and the Federal Trade Commission.

For example, a consumer who suspects identity theft may contact one national credit reporting company to request a fraud alert. That company must then notify the other two, and a lender that receives a credit application in the consumer's name is expected to take reasonable steps to verify the consumer's identity before extending credit.