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Fraud Alert: The Good, the Bad, the Ugly and The Bright Side

By Faye Mergel
Published: Sunday, July 25th, 2010

101929081A fraud alert is a safeguard tool used to notify everyone that checks a cardholder’s credit report that the cardholder is a victim of identity theft. Viewer of the report would have to verify that the cardholder is the person really applying for credit.

The service is free and takes about ninety days. An extended fraud alert, which lasts for seven years, needs an identity theft report from a law enforcement agency. An active duty alert, which lasts one year, is for military consumers who are away from home for duty.

The Good: Fraud Alert can be availed of for free. Unlike, credit report freeze, customers can obtain new credit while the alerts are used. The customer does not need to send mails to the three credit bureaus to notify them about the alerts since these are automatically wired to these bureaus once the alerts are activated. No fees are required when the customer requests for the alerts’ removal. Customers are also promised with free credit reports after placing their initial alert.

The Bad: Customers won’t be notified for any activity that involves about someone applying for a new loan or credit in the customers’ names. The alert lasts only for ninety days and the customer must request for a renewal or for an extended alert. If the customer neglects to have the alert renewed or replaced due to unintentional circumstances, the thieves would have his chance to try his luck and steal the credit information. Delays for approval of credit cards applications or new loans may happen. And for customers looking for employment or places to stay, they might not be getting either of those two right away.

The Ugly: Fraud alerts do not provide a hundred percent security guarantee. The ugly truth is that there are still spammers and imposters out there. Though fraud alerts may have protected some cardholders, others may still be vulnerable to these thefts. And even if a cardholder sets up a fraud alert on his credit report or performs a credit report freeze, impostors trying to get their hands on the information won’t get arrested. And with the rapid growth of e-commerce, there might be a probability that even impostors will create their own tools to bring down the barricades set-up to protect credit reports and financial information.

The Bright Side: Cardholders are advised to be observant and careful towards their credit activities. Identity theft can be further prevented if the cardholders check their reports regularly, be fully educated cardholders and be wise when dealing with other people. The government must also take part to this issue. Though it has passed laws to aid the credit industry, it should also go with the changes of the world.

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