What are the red flags rules?
What are the
red flags rules?
thieves use people’s personally identifying information to
open new accounts and misuse existing accounts, creating
havoc for consumers and businesses. Financial institutions
and creditors are required to implement a program to detect,
prevent, and mitigate instances of identity theft.
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.
personalized for your needs, giving all financial institutions and creditors the
opportunity to design and implement a customized program that is
appropriate to their size and complexity, as well as the
nature of their operations. Guidelines issued by the FTC,
the federal banking agencies, and the NCUA can help covered
entities design their programs. But the guidelines identify
only 26 possible red flags. These red flags are not a
checklist, but rather, are examples that financial
institutions and creditors may want to use as a starting
rulebook goes beyond these 26 possible red flags. It defines
in detail actual red flag rules, patterns, and conditions
that indicate possible identity theft.
Call us to discuss your situation and how we can help
Contact us to discuss your
situation and how the
book can help
improve your compliance.