What exactly is a fraud alert?/How & Why are they placed?

[Anonymous]

I'm confused -- I was recently notified that 'an initial fraud alert' was placed on all my credit reports. AFAIK, this is something that needs to be initiated by the consumer (me), right?

I definitely didn't ask for a fraud alert to be placed. Two of the CRAs said that they had placed them because of a heads-up from the originating CRA, which was Transunion.

I called Transunion to ask where the fraud alert had come from, and they said it was initiated by Verizon. I've never had an account or any kind of relationship with Verizon, so I was further confused.

Called Verizon's fraud department -- they say there's no way for them to initiate a fraud alert themselves in any case.

This is a total pain, because I have to through a quadruple-whammy phonetree now to contact any of the CRAs, as well as provide all sorts of extra identification for simple communiques.

So, um. What the heck is going on, forum? Any thoughts? How exactly do fraud alerts work and why are they placed, anyhow?

[llecs]

No, a FA can be added by the CRAs if you dispute something as "not mine" like and inquiry or an account. IIRC, you had an unauthorized pull by Verizon? If so, that's your probable source.

[Anonymous]

Yep, but I didn't dispute the inquiry with the CRA -- I contacted Verizon directly with a non-PP and Verizon agreed it was in error and processed it to be removed from my file. Does that generate a fraud alert?

And I didn't dispute any accounts as 'not mine' either. Very strange.

[RobertEG]

I dont disagree that consumers may see fraud alerts in their credit reports that did not originate at their request, but I dont see any statutory basis for this.

Fraud alerts, both initial and extended, are authorized under FCRA 605A only "upon direct request of a consumer."

Initial fraud alerts (FCRA 605A(a)(1))  are based simply on a consumer good-faith allegation of a suspicion of fraud or related crime, such as identity theft.  They really do nothing other than to alert those viewing their credit report of the existence of fraud or identity theft issues, and remain for 90-days.

Extended fraud alerts (FCRA 605A(b)) can last for up to 7 years, and place various restritctions on access to and use of a consumer credit report.  They require that the consumer file an identity theft (police) report with the CRA.  Again, extended fraud alerts are only entered into a consumer credit file "upon direct request of a consumer."

The consumer can rescind a fraud alert at any time.

FCRA 605(e) states that a CRA, upon being referred notice of a fraud alert from another CRA, shall treat the notice as a request for fraud alert as if it was received directly from the consumer.

I dont see any statutory provision for entry of a fraud alert not directly requested by the consumer.  Does anyone have a citation for such a procedure?