Financial Fraud Through the Lens of Extended Fraud Alerts

Nathan Blascak, Julia Cheney, Robert Hunt, Vyacheslav Mikhed, Dubravka Ritter and Michael Vogan

No 25-29, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: We use extended fraud alerts in anonymized credit reports to examine how identity theft, and subsequent clean-up, affects consumers’ credit outcomes. The immediate effects of fraud for these consumers are negative, relatively small, and transitory. After placing an alert, these consumers experience persistent declines in delinquencies and a 12-point increase in credit scores, and 11 percent of filers become prime consumers. Many of these consumers take advantage of their improved creditworthiness and obtain additional credit. Although alert filers have larger balances, their performance on loans is as good as better than before fraud, suggestive of a change in behavior following fraud.

Keywords: identity theft; fraud alert; consumer credit; credit performance (search for similar items in EconPapers)
JEL-codes: D14 D18 G51 (search for similar items in EconPapers)
Pages: 41
Date: 2025-10-06
Note: This paper supersedes 21-41
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:101886

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DOI: 10.21799/frbp.wp.2025.29

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