What is an Extended Credit Fraud Alert?

In the past ten years, there have been numerous data breaches of big companies like Anthem, Home Depot, Target, Capital One, Chili’s, Facebook, Google, and others. Consumers often don’t understand the ramifications of these data breaches and how to respond if they are affected.

In a few of the recent data breaches, the information stolen or accessed included credit card numbers, PINs, and banking information. If thieves get their hands on your information, they can charge purchases and services under your name on your card, and you will be responsible. Credit card fraud is when someone uses your credit card number to make unauthorized purchases without your knowledge. 

In each data breach, millions of customers’ data was stolen, and a lot of it ended up on the dark web, ripe for criminals looking to steal your identity. One of the best ways to know if you’re in danger of this is to initiate a fraud alert on your credit report.

Fraud Alert Definition

A fraud alert is a notice that you put on your credit report with any of the three major reporting agencies (Equifax, TransUnion, and Experian). It alerts the agencies to be on the lookout for anyone trying to open up new accounts.

Once the fraud alert is on your account, banks and other lending institutions must take extra steps to verify your identity before extending any credit. Unlike a credit freeze, your credit is still open to inquiries, but the notice is an important part of your protection.

There are three types of credit fraud alerts. There is an initial, or temporary, fraud alert that only lasts for one year then expires. There’s no limit to renewing an initial fraud alert which allows you to keep one active at all times.

There is also an active-duty fraud alert available to military personnel. This option also lasts a year and protects service members from fraud while they’re deployed. 

If you’ve already been the victim of credit fraud or identity theft, then it’s recommended to choose an extended fraud alert.

How Long Does An Extended Fraud Alert Last?

An extended fraud alert lasts for seven years and appears on your report almost immediately. It is only available to individuals who have been the victim of identity theft. To qualify, you must have reported the identity theft to the FTC and local authorities. You have to fill out an identity theft report.

You only have to alert one of the credit reporting agencies, and then they must contact the other two to have the notice placed on there as well. With an extended credit fraud alert, you are eligible to get a free copy of your credit report twice a year instead of once. The extra report allows victims to check how much damage the identity theft caused.

All three credit bureaus must also remove your name and information from marketing lists of prescreened offers for up to five years.

Can Someone Else Manage My Extended Fraud Alerts?

Anyone with Power of Attorney or a court document can initiate an extended fraud alert on your credit report. These representatives still need to submit an FTC identity theft report, and the process includes additional steps compared to when you do it yourself.

Each credit bureau will ask for the representative's information alongside the individual they're acting on behalf of. Representatives must also send copies of the individual's Social Security Card and birth certificate.

This option is typically reserved for incapacitated or missing persons. In these cases, it may be best to stick with a general fraud alert if you're unsure about how long they'll be unable to act for themselves.

Will an Extended Fraud Alert Negatively Impact My Credit?

An extended fraud alert on your credit file does nothing, negatively or positively, to your credit standing. However, it does add a step for creditors and may delay approval for new accounts. This problem could prevent you from credit opportunities that require instant approval, such as starting a credit line with a store at the register.

This is most notable when making expensive technology purchases that require financing. Smartphones frequently price around $1,000, so most carriers allow financing options. If you have an extended fraud alert set up, then the carrier needs to delay your application to avoid fraud.

You'll still have access to credit with those stores, but not at the precise moment you need it. If you need approval immediately, then your best recourse is to contact the lender directly for more options.

How to Sign Up for an Extended Fraud Alert?

If you wake up one day only to realize your identity has been stolen, take steps quickly to minimize the damage. A fraud alert is only one tool at your disposal. Signing up is quick and easy.

The first thing you’ll need is proof that your identity was stolen. You can get this through an FTC (Federal Trade Commission) identity theft report or a police report. However, getting a police report usually requires an FTC identity theft report in the first place.

Contact the FTC (Federal Trade Commission) and fill out an Identity Theft Report. Only report the truth and avoid unfounded accusations or ‘gut feelings’ about what happened. Providing false information in these reports is a criminal offense.

They’ll request the following information:

• Full Name
• Date of Birth
• Social Security Number
• Driver’s License Information
• Current Address
• Phone Number
• Email Address

After entering your information, the FTC provides a pre-filled document to hand over to the credit agencies. Currently, you can’t initiate an extended fraud alert online or by phone. Each agency has separate information or documents you must send by mail alongside your FTC identity theft report.

Experian has an additional form to send found on their website. You’ll also need to send a copy of your government-issued ID (driver’s license, passport card, etc.) AND a document showing proof of residence (utility bill, bank statement, etc.)

TransUnion doesn’t have a prepared form to fill out. It asks for slightly different information from Experian, but much of it is the same as what’s in the FTC report. It includes:

• Full Name
• Complete Current and Former Addresses
• Social Security Number
• Date of Birth (mm/dd/yy)
• Phone Number

You’ll also need photocopies of two forms of identification. The list of acceptable documents is found here.

Equifax also requires an additional form and two types of identification to be sent through the mail. Their printable form details both requirements and can be downloaded from their fraud alert page.

Remember that you don’t need to contact all three agencies to set up an extended fraud alert. Each agency is required to inform the others after receiving your report.

Seven years protects you for a long time, but you’ll likely forget when the alert expires. If you plan to keep a fraud alert activated for longer, then you should mark your calendar now.

Is a Credit Freeze Better than an Extended Fraud Alert?

Victims of identity theft or stolen data often see a credit freeze recommended as their best option. A credit freeze completely prohibits creditors from getting your credit report. This is an extreme measure for people with a strong reason to suspect their identity is in danger.

A good sign to initiate a credit freeze immediately is if you’ve been compromised by a data breach or see unusual activity on your card statements. A credit freeze is a more decisive choice for overall security. However, it comes with a few downsides to consider.

The first downside is also one of a credit freeze’s biggest strengths. It completely blocks lenders from accessing your credit report. If you forget you have a freeze active or don’t know that a lender is running a credit check, then your approval will be significantly delayed. The lender may not even contact you with the reason it’s taking so long.

The second is that you must contact all three credit bureaus separately for a freeze to be effective. Unlike an extended fraud alert, each bureau isn’t obligated to contact the other two. It won’t matter if you have a freeze at one bureau if the scammer goes through the others.

Despite these problems, if you suspect your identity was stolen, we recommend setting up a credit freeze over an extended fraud alert. There are fewer hoops to jump through for initiating a freeze than an alert.

Additionally, unfreezing or “thawing” your credit isn’t difficult. You shouldn’t face any difficulties as long as you know there’s an upcoming need for credit.

Other things you can do to keep your identity safe are:

• Sign up for credit monitoring with a good company like IDStrong.com and let them watch things for you. 
• Carefully monitor your credit card and bank statements each month.
• Watch out for phishing emails or scams. Identity thieves often use your information for these types of crimes. 
• Keep your computers and mobile devices updated with the latest operating system and security patches.
• Install and run antivirus software frequently.

Keep your eyes and ears open for anything that sounds “off” or too good to be true. Once criminals get their hands on your information, they will use it to contact you and try to scam you out of even more of your hard-earned money.