Initial Fraud Alerts

How to place or remove a fraud alert on your credit report

Initial fraud alerts

In the United States, under the provisions of the Fair and Accurate Credit Transactions Act (FACTA), if you have reason to suspect that you are a victim of fraud or identity theft, or are about to become a victim of fraud, you can place an initial fraud alert, or security statement, on your personal credit file for a period of ninety days in order to alert prospective credit grantors and attempt to keep thieves from opening new credit accounts in your name. The fraud alert must be renewed prior to the 90 day expiration in order for it to remain active. You can remove a fraud alert prior to 90 days if you request it (in writing) and provide proof of your identity.

Information for placing and removing a fraud alert is provided below.

Tip:  Contrary to popular belief, a fraud alert is not meant to be frivolously placed by anyone at anytime, or as part of a fee-based service that automatically places a fraud alert on your behalf without justification. The law indicates that there should first be a reason to suspect fraud or pending victimization. Widespread, unjustified use of fraud alerts will dramatically reduce their effectiveness and creditors will simply begin to disregard them altogether.

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:

1. When a fraud alert is placed, you need to provide at least one telephone number for confirmations. When a telephone number is provided, you must be contacted at that number, or the creditor must take other reasonable steps to confirm the identity of the person making an application for credit. Providing more than one telephone number increases the chances that you can be reached for confirmations.


2. You should keep track of the date on which you placed your fraud alert, and remember to renew the fraud alert at all three primary credit reporting agencies prior to the 90 day expiration.


3. If a prospective credit grantor does pull your credit report and actually heeds the fraud alert, the presence of the fraud alert will delay most instant credit applications. If you are applying for credit yourself, you should remember to inform the merchant or creditor at the time of application that a fraud alert has been placed.


4. Fraud alerts are rightfully considered a "red flag" by financial institutions and other creditors covered under the recently enacted Identity Theft Red Flags Rule regulation. The presence of a fraud alert on your credit file triggers a requirement for financial institutions and creditors governed by the regulation to take reasonable steps to confirm your (or the applicant’s), identity; and also to resolve any reported address discrepancy, prior to opening an account or conducting business with them, if the account opening, approval process, or transaction involves a review of your credit report.


5. Fraud alerts can also potentially be a double-edged sword for some fraud victims. Many banking and financial institution personnel are regularly instructed to not open accounts for persons with a fraud alert on their credit file. The rationale offered for this policy is typically that: 1) the person is either already a victim of identity theft or fraud or may have even been involved in fraudulent activity, and 2) he or she may return and attempt to falsely dispute otherwise legitimate transactions that may occur within the account on the basis that he or she is or was a victim of fraud. If you are a bona fide victim of identity theft or fraud, this can potentially cause further difficulties or delays when you attempt to close affected accounts and open new accounts with a financial institution that has such policies.

What Happens When a Fraud Alert is Placed

In an effort to minimize the steps required for a U.S. consumer to place an alert, a call to any one of the three primary credit bureaus* (Equifax, Experian, or TransUnion) to report fraud should result in the following actions:

• An initial fraud alert is automatically placed on your credit file at all three credit bureaus* for a period of 90 days.
• You are automatically "opted-out" of pre-approved credit and insurance offer lists compiled and sold by the credit bureaus for 2 years.
• Each credit bureau will process the request and forward you a free copy of your credit report to carefully review.

*Innovis is not included in this process and must be contacted separately to place a fraud alert. See contact information below.

How to Place or Remove an Initial Fraud Alert

You can use the following toll free numbers or websites to place an initial fraud alert or active duty alert. A written request is required to remove a fraud alert.

Tip: To be effective, you should place a fraud alert on your credit file at each of three primary national credit reporting agencies - Equifax, Experian, and TransUnion. Although these three credit bureaus are supposed to share fraud alert information, (i.e. placing a fraud alert on your credit file at the other two bureaus when an alert has been placed at one), this does not always happen and can dramatically reduce the effectiveness of the fraud alert. You should also remember to place a fraud alert on your Innovis credit file as well.