Quick Guide on Placing Fraud Alert

ElitePersonalFinance
Last Update: February 7, 2021 Identity Theft

With better access to information than ever before, identity theft is inevitably an all-too-common occurrence. Not only can there be immediate financial headaches to worry about, but victims can experience a wide range of other problems that take a considerable amount of time to resolve.

Thankfully, whilst technological advances potentially have made it easier for criminals to gain access to information in recent years, there are also attempts to combat identity theft instances. One possible approach that consumers may wish to take is using fraud alerts.

What is Fraud Alert?

A fraud alert is a safety feature offered by all three of the main credit-reporting agencies: Equifax, Experian, and TransUnion. Once initiated, a fraud alert will indicate to any potential lenders that you have concerns about your personal information secure and potentially at a higher risk of identity theft.

Theoretically, this should act as a trigger for any potential lenders to ensure that they provide additional protection, such as making a call-back before issuing any credit; however, unfortunately, one of the drawbacks of fraud alerts is that there is no compulsory action that needs to be taken by lenders if you put a fraud alert on your credit information. Consequently, whilst a fraud alert can provide an additional security layer, it won’t necessarily guarantee to prevent all risks of identity theft. Therefore, you may wish to consider fraud alerts alongside other preventative measures, such as a credit freeze or credit monitoring – both of which also have advantages and disadvantages.

How Does It Work?

If you decide that a fraud alert is suitable for you, you may be wondering how one works. The first thing to know is that three varieties are available: a 90-day alert, a one-year alert, and a seven-year alert. The variety you choose will depend upon your services, but it’s worth knowing that you can remove fraud alerts at any time; likewise, it is also possible to extend the duration of fraud alerts once they expire, if required – remember to arrange an extension for a 90-day alert before it expires, to avoid a lack of protection in the days it takes to complete the extension request.

A 90-day fraud alert is appropriate for those who have concerns that their information may have been compromised and that they could potentially find themselves the victim of identity theft.

A one-year fraud alert is available to those on active military duty who may be concerned about their information’s safety whilst away on duty and want to reduce identity theft risks until they return.

A seven-year fraud alert is best-suited for anyone who has already been the victim of identity theft and wants to reduce the likelihood of further violations whilst attempting to recover from the effects of any prior fraud.

Whichever option you choose, one of the great benefits is that, when using one of the three main credit-reporting agencies, the one you go with inform the other two about the fraud alerts. It is also possible to arrange fraud alerts through an identity theft protection business; however, very few such companies offer such a service due to legal complications.

In terms of the cost of arranging a fraud alert, it’s good to know that the process is free. Furthermore, as an added benefit, the major credit-reporting agencies will also offer a free credit report.

Pros and Cons

  • Three options are available.
  • Fraud alerts are free to arrange.
  • You can get a free credit report.
  • They can be withdrawn or extended.
  • Lenders aren’t obliged to act upon fraud alerts.
  • Fraud alerts alone can’t prevent identity theft altogether.

Effectively, fraud alerts can buy you time and give you pre-warning if someone attempts to make you the victim of identity theft, thus potentially enabling you to keep your information and finances safe.

Despite the effectiveness of fraud alerts, be sure not to rely on them exclusively, and be prepared to consider the possibility of using other tools to help reduce the chances that you fall victim to an attempted crime of identity theft.

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