The deadline is looming for the new FACTA Red Flag Rules
The FTC issued a press release yesterday suspending enforcement until May 1, 2009. This is not an extension of compliance but they will not actively enforce the regulation until May 1, 2009. This only applies to businesses under the oversight of the Federal Trade Commission (FTC). The link to the update is
http://www.ftc.gov/opa/2008/10/redflags.shtm
Additional iformation can be found at:
http://www.napleschamber.org/news-press/business-currents/detail.aspx?id=2409
Will your business be in compliance?
- Mandatory adherence by November 1, 2008
Who do the new rules apply to?
- If your business offers your customers deferred payments, multiple payment options (pay monthly or quarterly) or have a continuous relationship with your customers you must comply
- It only takes one account to become eligible for compliance
- If your business issues credit and/or debit cards to your customers you must comply
- If you are a user of consumer reports, this includes landlords and employers that conduct tenant or pre-employment background checks, you must comply
Compliance requirements:
- Create policies and procedures for dealing with address discrepancies on consumer reports
- Create policies and procedures for dealing with change of address notifications on credit and/or debit card accounts
- Create a written identity theft prevention program to detect, prevent and mitigate identity theft relating to covered accounts and other accounts with a reasonably foreseeable risk of identity theft
Elements of the written Identity Theft Prevention Program:
The Program must include the following:
- Identify the Red Flags specific to your business
- Detect Red Flags that have been incorporated into the program of the business
- Respond appropriately to any Red Flags that are detected
- Ensure the program is updated periodically, to reflect changers in risks to customers and to the safety and soundness of the business
The Program must be reasonable for the size and complexity of your business. Unfortunately there is no “one size fits all” template for the program. A risk assessment is required to identify your covered accounts, identity theft Red Flags and determine your risk level.
Carrie Kerskie, president of Marcone Investigations, Inc., is a certified identity theft risk management consultant, published author and public speaker on the topic of identity theft. She and her team of investigators have assisted identity theft victims and located identity theft criminals. Based on their experience Carrie and her team are able to conduct a diligent identity theft and fraud risk assessment of your business to determine your Red Flags.
Benefits of complying with the FACTA Red Flag Rules:
- Reduction of internal fraud
- Reduction of civil lawsuits for a breech of information
- Reduced risk of breech resulting in negative publicity
- Reduced financial risk of opening a fraudulent account
- Reduced risk of lawsuit
- Gain customer trust by protecting their personal identifying information
- Have a disaster plan in place in the event of a breech
- Avoid financial penalties for non-compliance