How a Fraud Alert Works
While the fraud alert is in place, credit should not be extended in your name unless the credit grantor using the credit report takes reasonable steps to verify the identity of the person making an application for credit, and/or contacts you at the telephone number(s) specified, thereby reducing some potential opportunities for identity theft.
A fraud alert is by no means fool-proof, and you need to understand the following weaknesses and limitations of the fraud alert system.
Important Considerations and Limitations of Fraud Alerts
A fraud alert is not an absolute guarantee that no new credit accounts will be opened in your name as many creditors, particularly "instant" credit providers, may still disregard the alert.
A fraud alert only has a chance to be effective if your credit report is actually pulled and reviewed by a prospective credit grantor, although even then it may still be missed or ignored. Many types of accounts, such as bank accounts, wireless / cellular, internet service, cable, utilities, etc. can easily be opened in your name without the creditor ever pulling your credit report.
Some additional important considerations for fraud alerts include: