FRAUD ALERTS – POOR PROTECTION AGAINST IDENTITY THEFT
While this sounds like good advice "fraud alerts" are a very poor defense against identity theft. Why?
The fraud alert is not statutory – it is advisory. New credit issuers are not required to notify you of a new account. The law advises them to do so and in our experience less than half provide notice – often little more than a message on your answering machine or voicemail.
Secondly, fraud alerts are easily manipulated by credit thieves and they can be changed, removed, or worse modified by credit thieves. For example, the security measures of the credit bureaus are so poor, that credit thieves with a minimum of personal information can and will either remove the alert, or change the phone number to themselves.
Most important is that a fraud alert is applicable only to credit theft. Credit theft is less than 25% of identity theft. The single greatest form of identity theft is Social Security Number hijacking often for purposes of illegal employment. Fraud alerts do nothing to prevent or detect from the common identity frauds of IRS fraud, Medical Benefits Fraud, Drivers License fraud or over 70 other frauds facilitated by the theft of identity information.
Lastly, the CEO of this company charges $99 per person per year to assist you with this free service.
If you think that the small benefit of fraud alerts are of value, save yourself some money. Buy 12 envelopes and $4.68 of stamps. Address each envelope four times with the addresses of the credit reporting companies. Write a letter demanding a fraud alert. Place a copy in each letter. Then once a quarter mail three letters – one each to each credit reporting company. Save yourself $93.
Even better take a really effective measure to protect yourself against credit fraud – lock down your credit history with a credit freeze. New applications for credit cannot be processed without your permission to access your report.