What is a Credit Card Fraud Alert?

A credit card fraud alert is generally a warning issued that states a person’s credit card may have been used fraudulently. In some cases, a consumer may request a fraud alert be added to his or her credit bureau records to keep unauthorized accounts from being opened and fraudulent charges from being made. Credit card fraud alerts may also be issued from credit card companies to consumers, warning them of possible fraudulent activity on their cards. Typically, credit card fraud alerts can help protect both consumers and credit card issuers.

If a person is a victim of identity theft or even just suspects his or her credit card information has been compromised, he or she may request a credit card fraud alert be added to his or her credit bureau file. The alert generally serves as a warning to potential lenders that someone other than the individual may be trying to use the person’s credit accounts and/or identity. In general, if a credit card fraud alert has been placed on a person’s credit bureau file, lenders are required to contact the individual directly to confirm he or she is the one requesting a new account or even a new card for an existing account.

There are two main types of credit card fraud alerts that can be added to a person’s credit report. One is called an initial alert, and it typically stays on a credit bureau file for 90 days. Anyone can request this type of alert be added to his or her credit report by contacting one of the major credit rating agencies. The other common credit card fraud alert is known as an extended alert, and it generally stays on a person’s file for seven years. For an extended alert to be issued, a person must typically submit a police report to one of the credit bureaus showing his or her identity has been stolen.

Another version of a credit card fraud alert is when a credit card company contacts a consumer because it believes the customer’s account is potentially being used improperly. This may happen, for example, when credit card data is found to have been stolen from a store or other organization where the consumer had done business. It may also happen if the credit card company notices unusual charges being made on a person’s account, such as for high-ticket items the person doesn’t usually buy or for purchases originating in an area the consumer doesn’t normally spend money.

In general, credit card fraud alerts can help protect both the consumer and credit card issuers. This is because both parties often have some financial liability in cases of identity theft. If accounts are fraudulently opened in a consumer’s name, he or she may be responsible for some or all of the charges made and may have to pay expensive legal fees to sort out the situation.

As for credit card issuers, many offer fraud protection clauses in its agreements, which state customers will not be responsible for charges proven to be fraudulent beyond a set amount. By alerting a consumer to potentially fraudulent charges early on, the credit card issuer can help limit the amount it may have to cover to meet these fraud protection obligations.