Credit scores stay the same despite fraud alerts

The recent case of an identity theft protection firm that was successfully sued for making false claims about its services highlights a little-known fact about fraud alerts, according to the New York Times: They don’t have any effect on credit scores.

The company in question, LifeLock, is alleged to have placed numerous fraud alerts on the accounts of its clients. While this undoubtedly had a negative effect on the personal finances of those consumers, a fraud alert amounts to no more than a “yellow flag,” according to the Times, and does not provide any surety against new account fraud. Nor does it affect a consumer’s credit score.

Additionally, the constant flood of fraud alerts from LifeLock customers makes lenders less apt to take such alerts seriously, making them a less useful tool for stopping fraud when it actually does occur, the newspaper says.

Through growing organization and technological sophistication, identity theft is a growing criminal industry worldwide, and consumers would be well-advised to carefully monitor their credit reports for unauthorized activity.

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