The practice of implementing and renewing fraud alerts by several companies selling identity theft prevention/recovery products may stop.

Fraud alerts can be put in place at one of the three major credit bureaus (which automatically notifies the other two bureaus) when an individual believes that they are a victim of identity theft or have reason to believe that may become a victim of identity theft.  The initial fraud alert lasts 90 days and then must be renewed or it drops off the individual’s credit file.

An entire identity theft prevention industry has come into existence primarily based upon a service which renews a fraud alert for individuals automatically every 90 days.

A court case involving identity theft protection service LifeLock and credit bureau Experian ended in LifeLock being ordered to stop implementing fraud alerts on behalf of third parties (Lifelock’s customers) at Experian.

Debix- another identity theft protection service - announced that they will discontinue the use of fraud alerts due to the opinion issued by the U.S. Federal District Court in the Experian v. LifeLock case.

Regardless of the court’s opinion and the impact on commercial identity services, individuals would be wise to consider a security credit freeze as a more powerful alternative to a fraud alert.  The security credit freeze offers better protection against new credit lines being opened because it blocks the credit bureaus from providing a frozen credit file to potential creditors rather than just the “note” a fraud alert places on a credit file.  While there is a fee each time an individual orders a freeze or thaw on their a credit file, the added security may be worthwhile for many consumers.

For example, if an identity thief applies for a new credit card in your name the card issuing company will attempt to pull your credit report to see if you qualify.  When a credit freeze is in place, the card company will not be able to access your credit report at all.  Therefore, the card company will not issue a new credit card to the impostor.

If the security credit freeze is not attractive to victims of identity theft, there is also the option of a seven year extended fraud alert.  Identity theft victims must provide an identity theft report in order to qualify for the extended alert.