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Easier Fraud Detection When Consumers Monitor Their Credit Reports

By Faye Mergel
Published: Saturday, February 20th, 2010

One of the biggest concerns among consumers today is identity fraud. It was bad enough a few years ago and now, with the current economic scenario, cases of identity fraud have gone up considerably. According to a research done by Javelin Strategies, there was a one in twenty chance of a consumer being a victim of identity fraud in 2009, an increase of 11% compared to the previous year.

Easier Fraud Detection When Consumers Monitor Their Credit ReportsThe risk exposure among consumers differentiate considerably depending on the consumer. For instance, young adults whose lives are often filled with numerous social networks and who have very active online lives, the risk is one in sixteen. The risk for small business owners who see a high transaction rate is also quite high, one in thirteen. Yet, there is an even more exposed consumer demographic.

A few consumers have received letters warning them that their data has been compromised, usually from their creditor, their employer or even their school or municipality. Consumers who receive these kinds of notices are in real danger of identity fraud and the chances that they become a victim to it is one in four.

Alarmingly, according to James Van Dyke of Javelin Strategies, most consumers who get these warning letters will ignore them. It’s not difficult to understand why these customers do so, however. For one thing, a lot of these letters will usually come with an offer for a credit monitoring service, usually offered free for one year or so to entice consumers. A lot of consumers are skeptical of these offers and doubt their legitimacy. The one year free offer is also readily ignored because most consumers are aware that they will get asked to pay for a subscription later on. Most of them may also not be comfortable with giving out their personal information to enroll in these credit monitoring services.

Although there is some legitimacy over these consumers’ reactions to identity fraud warning letters, a lack of response is still not a good thing for them. Identity theft is too damaging for consumers to take lightly and, if a consumer receives an identity fraud warning, they should at least check their credit reports. They can use the free credit reports offered at free-credit-reports.com. Consumers can get a free credit report from this site three times a year.

To escalate, consumers can also put a freeze or a fraud alert on their account with the three major credit reporting bureaus – Transunion, Experian and Equifax. A fraud alert costs nothing while a freeze will cost them $10 to activate and another $10 to deactivate unless the consumer really has been a victim of identity fraud.

Finally, the consumer must file a police report. They need not worry about law enforcement not being able to handle the situation. Reportedly, they are catching up fast.

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