Monday, November 5, 2012

Should You Pay For Credit Protection?

The Federal Trade Commission (FTC), the nation's consumer protection agency, says before you pay for an identity theft prevention product or service, make sure you understand exactly what you're paying for. Many people find value and convenience in paying an outside party to help them exercise their rights and protect their information.
At the same time, some rights and protections you have under federal or state laws can help you protect your identity and recover from identity theft at no cost. Knowing and understanding your rights can help you determine whether - or which - commercial products or services may be appropriate for you.
Fraud Alerts
A fraud alert is a signal placed in your credit report or credit file to warn potential creditors that they must use what the law calls "reasonable policies and procedures" to verify your identity before they issue credit in your name.
Fraud alerts may be effective at stopping someone from opening new credit accounts in your name, but they may not prevent the misuse of your existing accounts.
Under the federal Fair Credit Reporting Act (FCRA), you may be entitled to two kinds of free fraud alerts: initial and extended.
You may ask a consumer reporting company to place an initial fraud alert on your credit report if you suspect you have been, or are about to be, a victim of identity theft. This may be appropriate after your wallet or another source of personal information is lost or stolen.
An initial fraud alert is good for 90 days, and can be renewed when appropriate. To place an initial fraud alert, call the toll-free fraud number of any one of the three national consumer reporting companies.
The company you call is required to contact the other two; they, in turn, will place an alert on their versions of your report. Expect to receive a confirmation from each of the companies.

When you place an initial fraud alert on your credit report, you're entitled to order one free credit report from each of the consumer reporting companies; if you ask, only the last four digits of your Social Security number will appear on your reports.