Are you Red-Flag Ready?
In 2003, Congress passed several amendments to the Fair Credit Reporting Act. These amendments were put in place to address problems with identity theft and require some companies to develop a written program for identifying suspicious activity. These changes apply to credit reporting agencies and all other businesses that extend credit and have “covered accounts.” Extending credit can include any transaction where a good or service is paid for after it is received. Covered accounts can include accounts with multiple payments or transactions, as well as some types of accounts that are particularly vulnerable to identity theft. These new rules are in effect as of November 1st, although enforcement by the FTC will be delayed until May of 2009.
If you’re not sure your business is in full compliance with these rules, it is important to review your red-flag policies now. If you think your business might be included but you have not yet developed guidelines, you can review the FTC’s recommendations here. If you are unsure of how to comply with the rules, I recommend you seek the advice of counsel, but you can also utilize free resources at ftc.gov, or e-mail questions to redflags@fcc.gov. If you haven’t yet complied, you may still have time to amend your policies before enforcement actions begin. Of course, complying fully as soon as possible will help protect the customers you serve!
Tomi Turner works in ERA’s government affairs department.
Tags: congress, ERA, fair credit reporting act, ftc, Government Affairs, identity theft, red flag policies, tomi turner