What use is a fraud alert?

[Anonymous]

What use is a fraud alert with the bureaus if they don't even work? My husband I purchased a new vehicle last month with dealer financing. I told them immediately that we have a fraud alert on our accounts and that they would run into some red tape with that. They assured me it would be fine and that the bank would just have to call and verify with us that we were definitely seeking a loan before they could let the dealership know if the loan could be extended. They called two days after we purchased the vehicle. I asked a guy on the phone with myFICO today about that and he said he had never heard of this before and to try asking here. Thoughts? Where do you even begin with something like this?

[Anonymous]

From what I understand - having a fraud alert is a little bit more protection in case something appears on your report that shouldn't be there.  But it doesn't look like it's going to prevent obtaining credit.

[Donks3369]

To me fraud alert are pointless.  I work for a bank and we have to call on fraud alerts when people submit loans.  The problem is that 95% of the time a fraud alert doesn't give us a number to call for the customer.  So who do we call.......the number the applicant provided to us.  It would seem a little odd to ask the person that could be committing fraud, if they are committing fraud.  The whole thing is pointless.  If someone really wants to steal your identity, there isn't a whole lot you can do about it.  That is just my jaded opinion though.

[athensguy]

A fraud alert is merely a notation that something may be fishy with a credit file, and to try to get further verification before issuing new loans.

If you want to prevent your credit file from being used to open new loans, you are going to need to put a security freeze on it, which cause the CRAs to refuse inquiries that state they are of the type for seeking new credit.