NCJ 230590
Victim Assistance: Lessons From the Field
Tools/Resources for Victims
Fraud Alerts and Credit Freezes
What Is a Fraud Alert?
There are two types of fraud alerts: an initial alert and an extended alert.
- An initial alert—
- Stays on your credit report for at least 90 days.
- Is appropriate if your wallet has been stolen or if you’ve been taken in by a "phishing" scam.
- Potential creditors must use what the law refers to as "reasonable policies and procedures" to verify your identity before issuing credit in your name.
- You are entitled to order one free credit report from each of the three nationwide consumer reporting companies and, if you ask, only the last four digits of your Social Security number will appear on your credit reports.
- Stays on your credit report for at least 90 days.
- An extended alert—
- Stays on your credit report for 7 years.
- You can have an extended alert placed on your credit report if you’ve been a victim of identity theft and you provide the consumer reporting company with an Identity Theft Report.
- An automated identity theft report or the printed ID Theft Complaint available from the FTC or MCVRC should be sufficient to obtain an extended fraud alert.
- Potential creditors must actually contact you, or meet with you in person, before they issue you credit.
- You are entitled to two free credit reports within 12 months from each of the three nationwide consumer reporting companies.
- Stays on your credit report for 7 years.
To place either of these alerts on your credit report, or to have them removed, you will be required to provide appropriate proof of your identity: proof may include your SSN, name, address, and other personal information requested by the consumer reporting company. Depending on the type of fraud alert you place, potential creditors must either contact you or take reasonable steps to verify your identity. This may cause some delays if you’re trying to obtain credit.
What does a fraud alert not do? While a fraud alert can help keep an identity thief from opening new accounts in your name, it’s not a solution to all types of identity theft. It will not protect you from an identity thief using your existing credit cards or other accounts. It also will not protect you from an identity thief opening new accounts in your name that do not require a credit check, such as a telephone, wireless, or bank account. And, if there’s identity theft already going on when you place the fraud alert, the fraud alert alone won’t stop it. A fraud alert, however, can be extremely useful in stopping identity theft that involves opening a new line of credit.
What Is a Credit Freeze?
Consumers may "freeze" their credit by restricting access to their credit report. If you place a credit freeze, potential creditors and other third parties will not be able to get access to your credit report unless you temporarily lift the freeze. This means that it’s unlikely that an identity thief would be able to open a new account in your name. Placing a credit freeze does not affect your credit score—nor does it keep you from getting your free annual credit report or from buying your credit report or score.
Credit freeze laws vary from state to state. The ITRC provides a map with links available to the laws in each state. In some states, anyone can freeze his or her credit file, while in other states, only victims of identity theft can. The cost of placing, temporarily lifting, and removing a credit freeze also varies. Many states make credit freezes free for identity theft victims, while other consumers pay a fee—typically $10. It’s also important to know that these costs are for each of the credit reporting agencies. If you want to freeze your credit, it would mean placing the freeze with each of three credit reporting agencies, and paying the fee to each one.
Who can access my credit report if I place a credit freeze? If you place a credit freeze, you will continue to have access to your free annual credit report. You’ll also be able to buy your credit report and credit score even after placing a credit freeze. Companies that you do business with will still have access to your credit report—for example, your mortgage, credit card, or cell phone company—as would collection agencies that are working for one of those companies. Companies will also still be able to offer you "prescreened credit," the credit offers received in the mail that consumers have not applied for. Additionally, in some states, potential employers, insurance companies, landlords, and other non-creditors can still get access to your credit report with a credit freeze in place.
Can I temporarily lift my credit freeze if I need to let someone check my credit report? If you want to apply for a loan or a credit card, or otherwise need to give someone access to your credit report and that person is not covered by an exception to the credit freeze law, you would need to temporarily lift the credit freeze. You would do that by using a PIN that each credit reporting agency would send once you placed the credit freeze. In most states, you’d have to pay a fee to lift the credit freeze, and most states currently give the credit reporting agencies 3 days to lift the credit freeze. This might keep you from getting "instant" credit, which may be something to weigh when considering a credit freeze.
What is the difference between a credit freeze and a fraud alert? With a fraud alert in place, businesses may still check your credit report. Depending on whether you place an initial 90-day fraud alert or an extended fraud alert, potential creditors must either contact you or use what the law refers to as "reasonable policies and procedures" to verify your identity before issuing credit in your name. However, the steps potential creditors take to verify your identity may not always alert them that the applicant is not you.
A credit freeze, on the other hand, will prevent potential creditors and other third parties from accessing your credit report at all, unless you lift the freeze or already have a relationship with the company. Some consumers use credit freezes because they feel a freeze provides more protection.
As with credit freezes, fraud alerts are mainly effective against having new credit accounts opened in your name, but they are not likely to stop thieves from using your existing accounts or from opening new accounts, such as new telephone or wireless accounts, where credit is often not checked. Also, only people who’ve had their ID stolen, or who suspect it may have been stolen, may place fraud alerts.