Monday, November 16, 2009

Need a Fraud Alert on Your Credit Report?

You’ve probably heard stories about a company’s records being compromised and Social Security numbers, credit card numbers or other personal data being stolen. If your information was among the stolen data, what would you do? Well, after you’ve finished fussing and fuming about how it could have happened, there are options available to preclude or minimize any possible damage. Placing a Fraud Alert You could place a fraud alert. A fraud alert can help prevent the identity thief from opening an account in your name. There are two primary types of fraud alerts to consider. An initial fraud alert stays on your credit report for at least 90 days. During that time, creditors must use “reasonable policies and procedures” to verify your identity before issuing credit in your name. An initial fraud alert may be sufficient if you suspect that you have been, or may about to be, a victim of identity theft if your wallet or computer has been stolen or if you’ve been a victim of a phishing scam. The initial fraud alert also allows you to get a free copy of your credit report. The second type, an extended fraud alert, stays on your credit report for seven years. If you’ve been a victim of identity theft you can ask for an extended alert. You will need to provide the consumer reporting company with an Identity Theft Report accompanied by a copy of a report you have filed with a federal, state, or local law enforcement agency. This type of alert requires potential creditors to meet with you or contact you before issuing you credit. An extended alert entitles you to two free credit reports within twelve months from each of the three nationwide consumer reporting agencies. The consumer reporting companies will remove your name from marketing lists for pre-screened credit offers for up to five years or until you ask them to put your name back on the list if earlier. If you are a member of the military and away from your usual duty station, you may place an active duty alert on your credit report to help minimize the risk of identity theft while you are deployed. When a business sees the alert on your credit report, it must verify your identity before issuing you credit. The business may try to contact you directly, but if you're on deployment, that may be impossible. As a result, the law allows you to use a personal representative to place or remove an alert. Active duty alerts on your report are effective for one year, unless you request that the alert be removed sooner. If your deployment lasts longer, you may place another alert on your report. Whichever type of alert you place or remove, you will be required to provide appropriate proof of your identity such as your Social Security number, name address, and other personal information. You can place a fraud alert by contacting one of the three credit reporting agencies. The agency you contact is required to contact the other two to place an alert on their version of your report. Placing a Credit Security Freeze A more restrictive option is a credit security freeze. Most states have laws allowing the consumer to freeze their credit. A freeze restricts access to the credit report. Potential creditors won’t be able to access your report unless you temporarily thaw the freeze using a PIN so legitimate applications can be processed. The charges for placing a security freeze on your credit vary by state. There may be a fee to place the security freeze, to temporarily lift it, or to remove it. Pennsylvania has set a maximum fee of $10 to place or temporarily lift the freeze and it is waived for victims of identity theft. Persons 65 years of age or older are also exempted from the fee to place a freeze. There is no cost to remove the freeze in Pennsylvania. The three credit reporting agencies (Equifax, Experian, and TransUnion) or your state’s Attorney General’s office can provide information pertaining to your state. If you wish to open a new account while your files are frozen, you can lift the security freeze for a temporary period of time or with a specific creditor. Unauthorized Credit Card Use The above options all relate to the opening of a new account. None will stop someone who has obtained your credit card number from going shopping. If that is the case, contact the issuing bank or credit union immediately. Your monthly statement will have the toll-free phone number. Follow up with a letter including your account number, when you noticed the card was missing, and the date you first reported the loss. The maximum liability for unauthorized use of your credit card is $50 per card if reported within 60 days. If reported before the card is used, you are not responsible for any charges. If the card was not stolen or lost, but the number was used, you have no liability for unauthorized use. Always review your billing statements carefully and watch for any questionable charges. For additional information on placing a fraud alert or credit freeze, go to: Federal Trade Commission at Pennsylvania Attorney General at Consumers Union at Bankrate .com at

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