Fraud Alert or Credit Freeze: What's The Difference?
Monday, January 07, 2008
While discussing identity theft with a business acquaintance, the topic came up about how best to protect our identities. The person mentioned that they had a Credit Freeze in place, but that it was only good for 90 days. This was a clue to me that the person had a Fraud Alert in place and not a Credit Freeze. A comparison of the two options:
|Fraud / Security Alert||Credit / Security Freeze|
|Definition||A special message attached to a consumer's credit file that indicates the individual may be a victim of identity theft. The alert may require potential lenders to contact the consumer via phone before issuing credit.||A feature for national credit reports where all companies and potential lenders (except where exempted by law) cannot access a consumer's credit report without the consumer's permission.|
1. Free for consumers
2. Alert durations available for 90 days or 7 years. Military personnel: Active-Duty Alert (12 months)
3. After adding an alert at one credit bureau, the other 2 credit bureaus automatically add an alert
1. Generally, free only for identity theft victims (IL, NM, and RI: free for all residents 65+)
2. Stops identity thieves from opening new accounts or getting credit, loans, or mortgages in your name
3. Stops credit bureaus from distributing your credit report
4. Consumer can lift or remove the freeze when needed for potential lenders (PIN number provided)
1. Credit bureaus still distribute your credit report
2. Identity thieves can apply for credit or loans and approval may still "sneak through"
1. If you are not an identity theft victim, fees apply to add, lift, or remove a freeze at each credit bureau
2. You must add, lift, and remove a freeze separately at each credit bureau
3. To apply for credit, you must temporarily lift the freeze on your credit reports. This may cause a delay getting credit approval
4. Banks and companies that provide consumer data to the credit bureau will not be allowed to update the name, address, SS#, and birth-date data on your credit reports
|Availability||Nationwide||Nationwide, including Puerto Rico, Guam and the U.S. Virgin Islands|
|Other||1. Adults only||
1. Adults only
2. Temporary freeze lift: 3 days minimum and 30 days maximum
Want to learn more? You should be aware of certain identity-theft situations where neither a Security Freeze nor a Fraud Alert will prevent. Also, the Security Freeze laws in many states do not cover consumers' C.L.U.E. insurance reports. You still should shred snail-mail and paper documents with sensitive personal data. And, for maximum protection you should also take advantage of the opt-out resources.
Great chart describing the diference between the two types of protection.
Posted by: LifeLock Jeff | Friday, March 27, 2009 at 10:51 AM
80 percent of identity fraud today is what’s called synthetic ID fraud or ID cloning. What the ID thieves do is steal only your SSN and through a variety of nefarious, but quite clever methods, create a brand new person. The problem for you is that the fraud usually won’t show up on credit reports because the only identifier that matches you is the SSN.
And what if the fraud is not financial in nature?
It won’t show up at all…comforting, huh?
Posted by: theidtheftguy | Wednesday, May 05, 2010 at 08:27 PM
What steps should I take when I suspect someone has stolen my identity? Some things to consider doing immediately are to perform a fraud alert and freeze my credit files...
Posted by: scoremore | Thursday, October 21, 2010 at 09:45 AM
Scoremore raised a good question. There is no single correct answer.
What to do after your identity information has been stolen ***depends*** upon the type(s) of sensitive personal information stolen. If only your credit cards were stolen, you must notify your bank(s) within 30 days. It is likely your bank will issue replacement accounts and you will have to update any auto payments from that account.
If you bank account numbers and sign-in credentials were stolen, obviously you will want your bank to close that account and open a new account. If money has already been withdrawn fraudulently from your bank accounts, then it is identity fraud and other steps must be taken, such as filing a police report.
If your Social Security number (or equivalent tax ID number) was stolen, then a fraud alert on your credit files is wise. If criminals have already taken out fraudulent loans in your name, that is identity fraud and a Security Freeze is appropriate to stop the criminals from taking out more fraudulent loans.
If your medical plan information has been stolen, then different steps must be taken because a Fraud Alert or Security Freeze on your credit files won't stop this. If somebody has already gained health care in your name, that is medical fraud and your medical records are probably compromised. Different steps must be taken to clean up your medical records.
If you identity information was stolen and then used during a crime, then a different set of steps are necessary since the police will come looking for you. You may have to provide fingerprints to prove your innocence.
If your passport information has been stolen, check with the issuing government agency about what specific steps you must do. If this happens while traveling abroad, you probably should visit the embassy for your country.
Posted by: George | Thursday, October 21, 2010 at 10:29 AM