Which statement is true about fraud alerts and identity theft?

• A. A fraud alert must be included if the consumer has provided an identity theft report.
• B. A fraud alert is never included in consumer reports.
• C. Fraud alerts can only be requested by the lender.
• D. Fraud alerts must be cleared after six months.

Answer: (A)

When identity theft is reported, a fraud alert must be added to the consumer’s credit file. This alert tells lenders to take extra steps to verify the borrower’s identity before approving new credit, helping to prevent fraudulent accounts from being opened. That’s why the statement is true: providing an identity theft report triggers the inclusion of a fraud alert in consumer reports. Fraud alerts can be placed by the consumer and are required to appear in reports to help protect against fraud; they are not limited to lender requests, and they don’t automatically clear after six months. There are two common durations: an initial fraud alert lasts about one year, while an extended fraud alert lasts seven years with additional verification requirements when needed.