Do you have unknown charges on your bank statements or new phone bills you’ve never applied for? Or perhaps you’ve found unfamiliar accounts on your credit report? These are telltale warning signs of identity theft. A scary but very real problem millions of Canadians face. The question is, how can you protect yourself from identity theft, and what happens if you’re a victim?
Fortunately, you can protect yourself in this situation by placing a credit fraud alert on your credit report. Read on to find out how this works and how it can protect you against identity theft.
Key Points
- A credit fraud alert is a note you can place on your credit reports to alert potential lenders and creditors that you may be a victim of identity theft or fraud.
- A fraud alert will alert creditors to take extra precautions to verify your identity before extending new credit in your name.
- You can protect yourself from identity theft by protecting your personal data, changing your passwords, and regularly checking your credit reports.
Identity Fraud In Canada
When you’ve been a victim of identity theft, it means someone out there has access to your personal information and is using it for criminal purposes. They may have access to certain information such as your name, address, date of birth, driver’s license number, credit card details, and even your SIN. With access to such information, they can commit several criminal acts against you, including:
- Creating new accounts in your name, including credit cards, personal loans, and even phone accounts.
- Taking out multiple loans through online lenders.
- Using your identity to buy a new car.
- Using your credit or debit card accounts to make unauthorized purchases.
Criminal acts like these can be extremely damaging to your credit health, making it difficult for you in the future when you want to apply for a loan or new credit account that requires a credit check.
What Is A Credit Fraud Alert?
A fraud alert is a free service offered by the credit bureaus to help protect yourself from identity theft and financial fraud. When you place a fraud alert, it adds a notice to your credit file to alert companies that your personal information may be compromised.
This encourages companies to take extra steps to verify your identity when opening an account under your name, which makes it more difficult for an identity thief to commit fraud.
Equifax also offers a paid service for Manitobans and Ontarians, called “Identity Alert”, which requires lenders to contact you before extending new credit.
How Does Fraud Alert Work?
In Canada, there are two national credit bureaus you can place an alert with: Equifax and TransUnion. Placing a fraud alert on your credit file with these credit bureaus will inform lenders and creditors of your situation and that they should take extra measures to identify you, such as calling you before offering credit.
For example, when you apply for a personal loan, a mortgage, a car loan, or even a new credit card, companies will check your creditworthiness as a way to gauge your likelihood of repaying what they lend to you. This is when the fraud alert will come into play. When lenders go to check your credit file, they will see the fraud alert on your account and know that they must take extra precautions to confirm you are who you say you are.
How Do You Place A Fraud Alert In Canada?
Each credit bureau has its own processes when placing a fraud alert on your credit file. When doing so, consider placing it with both credit bureaus, as some lenders only check in with one credit bureau. By placing an alert with both, you’ll increase the chances of catching any fraudulent activities.
Placing Fraud Alert With Equifax
Two alerts can be placed on your credit report with Equifax, Identity Alert and a Fraud Warning.
Identity Alert
An Identity Alert is only available in Manitoba and Ontario and requires the lender or creditor to call you before extending new credit. This alert will remain on your credit report for 6 years unless you specifically request in writing for it to be removed.
To place an identity alert on your Equifax credit report, you’ll need to provide certain documentation to validate your identity and address.
This is a paid service, which costs $4.95 for the first month, then $24.95 per month going forward.
Fraud Warning
Fraud Warning (aka fraud alert) is only available to those who have been a victim of identity theft or fraud. It stays on your credit report for 6 years and is completely free to place.
You can place an identity alert or a fraud alert in the following ways:
- By calling their automated line at 1-800-465-7166
- By submitting a form online
- By sending a request by mail
You’ll need to provide some personal information, so be ready to answer questions regarding your identity, including your SIN, address, and date of birth.
Placing Fraud Alert With TransUnion
If you believe your identity has been stolen, you can place a Potential Fraud Warning on your credit report. You can place a fraud alert in the following ways:
- Online via the bureau’s self-service website
- By calling 1-800-663-9980
- By mailing a completed dispute form
You’ll need to provide ID when submitting your request.
How To Protect Yourself From Identity Theft
Understanding how criminals gain access to your personal information is one way of taking proper actions that will protect you. Typically, information is gathered through data breaches, hacking, malware attacks, dumpster diving, or by stealing your mail, wallet, or purse.
So, how do you keep yourself safe from it all? There are many ways to protect yourself from identity theft, including the following:
- Don’t carry your SIN card or any extra credit cards when you go out. Leave them at home.
- Don’t give your SIN, passwords, or other personal information that can lead to identity theft to people who email or call you.
- Use a shredder when discarding personal or confidential information.
- Double-check your bill statements to make sure all transactions are yours.
- Don’t download anything on your computer from someone you don’t know or trust.
- Monitor your credit report for any suspicious activity.
By taking these precautions in your everyday life, you can reduce your chances of identity theft. But as you know, these methods aren’t foolproof, and sometimes data breaches are out of your control.
So, despite your best efforts, you may still find yourself a victim of identity theft. Adding a fraud alert to your credit file is a solid way of creating your own “firewall” against it.
Can I Still Apply For A Loan If I Have A Fraud Alert On My Credit Report?
Yes, you can still apply for a loan or credit product with a fraud alert on your credit reports. However, the process may take more time because creditors will have to take extra steps to verify your identity before extending a loan. This is done to make sure that you are the one who completed and submitted the application, and not an unauthorized person.
How Do I Remove A Fraud Alert?
To remove a fraud alert, you’ll need to contact the appropriate credit bureau.
Equifax
To remove a fraud alert on your Equifax credit report, you can mail a written request along with copies of two pieces of ID to the following address:
| Equifax Canada Co. Consumer Relations Department Box 190 Montreal, QC H1S 2Z2 |
TransUnion
You can remove a fraud alert on your TransUnion credit report in the following ways:
| Online | Visit TransUnion’s self-service website |
| Telephone | 1-800-663-9980 |
| TransUnion Consumer Relations Department 3115 Harvester Road, Suite 201 Burlington, ON L7N 3N8 |
How To Deal With Fraud Issues And Identity Theft
If you realize too late and are now a victim of identity theft, there are some steps you can take to prevent any further damage to your credit report and name.
- Contact your local authorities and report the theft of your identification. This will be the proof you provide your banks to erase any unauthorized debt taken under your name.
- Contact your financial institutions and file an Identity Theft Statement. By doing so, they can start an investigation into any fraudulent charges.
- Change your passwords on as many devices and platforms as possible.
- Call both TransUnion and Equifax to place a fraud alert on your credit file and to obtain your credit report to check for any further suspicious activities.
Is A Credit Freeze The Same As A Credit Fraud Alert?
No, a credit freeze and a credit fraud alert are two different things, though they’re both used to protect your credit:
- Credit Freeze: This tool locks your credit report so new creditors are unable to access it. This prevents new accounts from being opened in your name. However, you’ll need to remove the freeze if you plan to apply for a loan. Keep in mind that a credit freeze is currently only available to residents of Quebec.
- Credit Fraud Alert: This tool adds a note to your credit report that alerts creditors to verify your identity before opening a new account and extending credit. It’s not as restrictive as a credit freeze and allows creditors access to your credit reports, though with additional precautions.
Bottom Line
Understanding fraud alerts and how to place one on your credit file can help you defend yourself against potential identity theft. This is especially pertinent as identity theft can lead to huge debt, bad credit, and even bankruptcy. Taking precautions in your everyday life like updating passwords, keeping personal data confidential, and regularly checking your credit report are great ways of preventing it altogether.
