ID Theft- Red Flags Rules
Compliance deadline, November 1, 2008
Who Must Comply: Financial institutions and creditors such as; retailers, automobile dealers, utility companies, telecommunications companies, and others.
The FACT ACT
The Federal Trade Commission (FTC), the federal bank regulatory agencies, and the National Credit Union Administration (NCUA) have issued regulations (the Red Flags Rules) requiring financial institutions and creditors to develop and implement written identity theft prevention programs, as part of the Fair and Accurate Credit Transactions (FACT) Act of 2003. The programs must be in place by November 1, 2008, and must provide for the identification, detection, and response to patterns, practices, or specific activities – known as “Red Flags” – that could indicate identity theft.
Red Flags Requirements
To satisfy Red Flags requirements, programs must include the following:
- Reasonable policies and procedures for detecting, preventing and mitigating identity theft.
- Ability to identify relevant patterns of activity considered Red Flags.
- Periodic updates to reflect changes in risks from identity theft.
Guidelines to Compliance
10-Step approach to the Red Flags Compliance program is:
- Conduct risk assessment.
- Design, develop and implement a program that is appropriate to the size and complexity of the organization.
- Identify relevant risk categories and covered accounts, which are vulnerable to identity theft
- Identification of identity theft Red Flags.
- Develop methods for detecting Red Flags.
- Develop appropriate responses to Red Flags.
- Update existing policies and procedures.
- Review training requirements.
- Review approaches for documenting compliance with Red Flags Rules.
- Provide methods to maintain the Compliance program.
Contacts
For assistance with FACT Act - Red Flags Rules compliance and solution approach, please contact Robert Putrus at robertputrus@therobertsglobal.com or call 760.550.2160.
Robert Putrus is a Certified Fraud Examiner and Certified Management Consultant.
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