What are Credit Card Fraud Alerts

Considering how often we use our credit cards and the importance of our credit report, identify theft is a serious issue. Placing a fraud alert on your credit cards is the easiest way to take control over your credit file and protect your credit score. Signing up for a fraud alert is simple and effective, because it ensures that businesses take extra precautions when setting up credit in your name. Fraud alerts will stay on your credit report for one year but can be renewed. 

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Experts suggest that a credit freeze—or security freeze—offers the maximum protection from your personal information being used to open a credit account, but a fraud alert is the least you can do to offer yourself some level of protection.

If you are a service member on active military duty and want to add an extra layer of protection from fraudulent activity or identify theft while you are deployed, you can sign up for an active duty alert. Similar to a traditional fraud alert, an active duty alert will last for one year. Your name will not show up for pre-screened credit card and insurance offers for two full years. 

In the sections below, we’ll discuss fraud alerts in more depth and how to place one on your account. 

What is a credit card fraud alert?

A fraud alert is a notification on your credit report that informs anyone in the process of reviewing the report that there may be an instance of identity theft or fraudulent activity in your name.  This raises concern and gives creditors and lenders reason to dig deeper in their vetting process, oftentimes making a phone call to see if you’re really at a certain store applying for credit. This process makes it more difficult for fraudulent activity to take place, because it causes lenders to take further measures when confirming your identity. 

There are two types of traditional fraud alerts: an initial fraud alert and an extended fraud alert

With an initial fraud alert, the notification will be present for 90 days. Once the 90 days is up, the credit bureaus will automatically erase it from your reports. If, at this time, you still have reason to believe that you are a victim of identity theft, you can request an additional 90-day fraud alert. 

An extended fraud alert is a bit more involved. In order for this fraud alert to be placed on your credit reports, you have to file an identity theft report with the Federal Trade Commission once your identity has already been stolen. 

In some cases, you might need to go to your local law enforcement and file a report. In the case of an extended fraud alert, creditors will need to either contact you in person or through the contact method you chose, in order to confirm your identity. 

When to place a fraud alert

Don’t waste any time—as soon as you notice any sign of suspicious activity on the account, it’s time to place a fraud alert. Here are some common signs of identity theft or fraud:

  • A sudden, drastic change in your credit score. 
  • Withdrawals from your bank account that you don’t recognize.
  • A new and unfamiliar line of credit opened in your name. 
  • Receiving calls from debt collectors about debts that you don’t know about. 
  • Your social security number has been compromised. 
  • Unauthorized charges or accounts open on your credit report. 
  • Unfamiliar medical bills. 
  • Merchants not accepting your checks.
  • Health insurance denying you coverage due to a medical condition that you don’t have. 
  • Notification from the IRS that you have multiple tax returns filed under your name OR questioning income from an employer that you’ve never worked for.
  • Receiving notice that your personal information was compromised by a hack or a data breach occurring at your place of work and/or company where you have an account. 

As you can see, there are a lot of things that can happen when you are a victim of fraudulent activity or identity theft. It’s important to be vigilant and stay on top of all of your existing accounts. The sooner you catch it, the easier it is to fix. 

Make sure that you are regularly checking your credit card statements for unfamiliar transactions. You can even sign up for text or email alerts regarding your credit card transactions. Many websites offer you a free credit report. Monitor your credit report and credit card activity on a regular basis so that you can take action the minute that something doesn’t look right. 

Call your issuer immediately if you notice a charge that you don’t recognize. Once you dispute the charge, your credit card issuer cannot charge interest or fees on the transaction until it’s done being investigated. 

*If you’ve recently lost your social security card or have reason to believe that your social security number has been stolen, contact the Social Security Administration to apply for a new one. It’s strongly advised that you place a credit freeze on your credit reports through each of the three major credit bureaus. 

How to place fraud alerts on your credit cards

To place a fraud alert on your account, simply contact one of the three major credit reporting agencies. Whichever one you contact will take care of contacting the other two. 

Call, apply online, or write a letter to any of the following three credit bureaus:

TransUnion fraud alerts:
(800) 680-7289
TransUnion Fraud Victim Assistance Department, P.O. Box 2000
Chester, PA 19016

Equifax fraud alerts:
(888) 766-0008
Equifax Consumer Fraud Division, P.O. Box 740256
Atlanta, GA 30374

Experian fraud alerts: 
(888) 397-3742
Experian, P.O. Box 9554
Allen, TX 75013

Each credit bureau will then get in touch with you shortly to confirm the alert placed on your account, so be certain that they receive your contact information correctly. It’s advised that you hold on to the email or letter from the credit bureau validating the fraud alert just in case a lender ignores or overlooks the requirements and allows a fraudulent account to be opened. 

How credit card fraud alerts affect your credit report

Fraud alerts will not damage your credit score. However, placing a fraud alert on your account could hinder the application process from getting to the risk scoring phase. 

Due to the Fair and Accurate Credit Transactions Act (FACT Act), lenders must take care in performing certain actions upon receipt of a credit report with a fraud alert.  If it’s an extended fraud alert, they are required to contact you. In this case, most lenders have a system set in place for manual processing. 

A manual review process will likely slow down the lending process, but it doesn’t stop it from being completed. That being said, there are many day to day instances in which a manual review process can’t be done.

For example, a sales clerk at a retail phone store is typically not authorized to run identity checks and/or override the credit review system. In these situations, the store would most likely delay the process in an effort to protect everyone involved from potential fraud. 

It may seem like an inconvenience, but if you’re a victim of identity theft, the added security is worth all of the extra steps and delays.