Shield Your Savings: Empowering Members Against Credit Fraud

Once you've fought and won better wages for your members, a great next step you can do as a union leader is to make sure they don't lose their well-earned income to scams and fraud.

With financial scams and identity theft a constant threat, it’s vital to arm members with the knowledge and tools to protect themselves. One of the most effective ways to secure one’s financial identity is through the use of credit freezes and fraud alerts. These tools can serve as a shield against the evolving threats of credit fraud and identity theft. This article will provide information on these protections and steps to help your members protect their hard-earned savings.

Understanding Credit Freezes

A credit freeze, also known as a security freeze, is a tool you can apply to restrict access to your credit report, making it more difficult for suspected identity thieves to open new accounts in your name.¹

A credit freeze locks your credit report from being accessed by new creditors. It is has specific laws that offer this as a strong consumer protection against identity theft.² Existing creditors or debt collectors, however, can still access it.

How to Place a Credit Freeze

Placing a credit freeze is straightforward:

1. Contact each of the three major credit bureaus (Equifax, Experian, and TransUnion).
2. Provide necessary identification to verify your identity.
3. Request a freeze on your credit.

It’s important to note that while a credit freeze can protect against new fraudulent accounts, it does not prevent identity thieves from misusing your existing accounts.

Pros and Cons

Pros:

• Effective at preventing new fraudulent accounts.
• - Free to place and lift.

Cons:

• Does not protect existing accounts.
• Requires management, especially when applying for new credit.
  
  

Exploring Fraud Alerts

Fraud alerts are another layer of protection, less severe than freezes, that can help protect your identity.

What is a Fraud Alert?

A fraud alert requires creditors to verify your identity before opening new accounts or making changes to existing ones. It’s particularly useful in warning potential creditors that you may be a victim of identity theft.

Types of Fraud Alerts

1. Initial Fraud Alert: Lasts for one year and is ideal if you suspect you are a victim of identity theft.
2. Extended Fraud Alert: Lasts for seven years and requires a police report as evidence of identity theft.
   
   

Setting Up a Fraud Alert

To set up a fraud alert, you only need to contact one of the credit bureaus, which will then notify the others.

Comparing to Credit Freezes

While fraud alerts are easier to set up and do not interfere with obtaining new credit, they are less secure than credit freezes as they depend on creditors taking additional steps to verify identity.

Practical Steps for Union Members

As a union leader, you can guide your members through the process of taking steps to better protect t​​heir credit and identity:

1. Educate members about the importance of regularly checking their credit reports.
2. Provide step-by-step guides on how to contact credit bureaus for freezes and alerts.
3. Encourage members to report any suspicious activities on their accounts.

Support Resources for Union Members

Many unions offer additional support resources, including access to financial counseling services. Encourage your members to utilize these services for:

• Personalized advice on managing credit.
• Assistance with setting up freezes and alerts.

Conclusion

Empowering your members with ways they can use credit freezes and fraud alerts is a vital part of protecting their financial security. As union leaders, continually providing members tools and support necessary to defend against threats and maintain financial health will help grow solidarity with your union. Make financial security a cornerstone of your union’s benefits.

1. What To Know About Credit Freezes and Fraud Alerts from the FTC
2. Warming up to Credit Freeze Laws: The Case of Utah by Brett W. Barrus

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