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2007-09-20 05:31:29

Credit Card Fraud Alert - a Cure-all for Identity Theft?

There are a number of reasons that make you ineligible for the credit card deal you want. You may be under the age or your credit history may be too short. If you have applied for credit before, then the reason for the denial may be your poor spending habits and thus- low credit score. In other words, you are a high risk in the eyes of your creditors and they wouldn't venture to deal with you.

While all these reasons are plain and clear to understand and admit, there is yet another arousing the fog of confusion among credit consumers and thus - wanting clearing up.

Customers' opinion on fraud alerts, their efficiency and impact on the future eligibility are very different and, as research shows, are not entirely true. The big misconceptions about the work of fraud alerts lead to a mess in the relationship between credit card companies and customers. So we decided to consult some of the credit industry's representatives to dig the truth and guide customers in the right direction.

  • Some customers think that putting a fraud alert on the credit file will protect them from unauthorized credit card use and identity theft. In reality, though basically anyone can raise a free 90-day fraud alert, it may be ignored by the credit company. So, you shouldn't completely rely on the fraud alert if you suspect someone is opening credit card account in your name. You should be able to protect yourself by closely watching your credit report for new information.
  • Most credit consumers are convinced that they will by all means be contacted by the creditor when they have fraud in place. Not really so. The lender is not required by law to phone you for identity verification. The law just asks them to take action to confirm that a new credit line is not the result of identity and credit card information theft. If, for some reason, the creditor can't reach you or is unable to do it, the application is automatically denied.
  • Some also look forward to opening new credit card accounts with a fraud alert in their credit file. Theoretically, you should be eligible for a new credit card deal, but the creditor always reserves the right to deny your credit card deal. So, you'd better remove the fraud alert record from your credit file before applying for a new credit card.
  • Many people are afraid that once they raise a 90-day fraud alert, you cannot remove it when you want. No, if you request it in writing, the creditor will remove the record. You will have to provide your name, social security number, address, telephone number and send all this information to the credit bureau at which you raised the alert. Or you can just wait the 90 days.

So, what are the drawbacks of the fraud alert active? It will cause some difficulty for you visiting electronic stores and signing up for their credit card offers. You will have to be always available at work or home to prove you are opening the new credit account.

The good thing about the fraud alert active is that your current bank account is fully protected and so you can be sure you are guarded from credit card fraud for the time being.

With all this, however, be ready that your next credit card deal may be denied as, flagging a fraud alert, you present a high credit risk for the potential lender.

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