| The Red Flags Act is apart of the Fair and Accurate | | | | The company must have specific procedures in writing |
| Credit Transactions (FACT) Act of 2003. This act | | | | regarding the implementation, audit compliance, training |
| was put into place in hopes of protecting consumers | | | | of staff, issuing annual reports and overseeing anyone |
| against identity theft and other types of credit fraud. | | | | granted access to accounts. |
| All financial institutions and creditors, both big and small, | | | | The important aspects of this act are to have specific |
| are required to be compliant with the Red Flags Act | | | | procedures in writing, produce annual reports and have |
| by November 1, 2008, or face potentially large fines | | | | a strict procedure for handling suspicious documents or |
| and difficult audits by the Federal Trade Commission | | | | activities. Companies are now responsible for helping |
| (FTC). | | | | to detect fraudulent activities and responding according |
| There are 4 Red Flags Compliance issues that you | | | | to the Red Flags Act. |
| need to be aware of: | | | | It is not enough to just keep a watchful eye out for |
| 1. When is the compliance deadline? | | | | problems. And it is not enough to only take action |
| As stated before, November 1, 2008 is the deadline for | | | | when there is a problem in the future. These rules are |
| you to be compliant with this new law. There has | | | | real and written procedures must be put into place |
| been almost no publicity regarding this November 1, | | | | before November 1, 2008 or else companies can face |
| 2008 deadline and it is expected to catch a lot of | | | | strict enforcement. |
| mortgage brokers, financial institutions and creditors off | | | | 4. What is the next step in getting compliant? |
| guard. | | | | If you work with consumer credit in anyway, then you |
| 2. Who must comply with these new rules? | | | | must take action now and get compliant. There are 2 |
| Basically any company working with consumer credit; | | | | ways to achieve this. |
| mortgage brokers, banks, credit unions, credit issuers, | | | | You can do it yourself by reading through the 256 |
| utility companies, auto dealers, healthcare companies, | | | | page FTC Report (just Google "FTC red flags |
| debt collection agencies, etc. | | | | compliant" to see the report). I have read through |
| 3. How can you quickly comply with Red Flags Act? | | | | parts of this report and was thoroughly overwhelmed. |
| The following is just a basic overview of the items that | | | | Or you can find a company that specializes in helping |
| all companies must comply with, to get a more detailed | | | | companies getting compliant. I contacted several |
| explanation you can visit the FTC Website or view a | | | | companies regarding this and found that prices and |
| special report on the topic Owners of companies (or | | | | quality were very inconsistent. Do your due diligence |
| senior managers) must approve the identity theft | | | | and choose wisely because finding the right company |
| prevention program as well as be involved in the | | | | can make this process go much smoother and faster |
| oversight, development, implementation and | | | | for you. |
| administration of the program. | | | | |