"Red Flags Rule" Scheduled to Take Effect November 1, 2009 Extended until June 1, 2010
After a one-year delay, the Federal Trade Commission (FTC) Red Flags Rule, requiring financial institutions and creditors to develop and implement written identity theft prevention programs are set to take effect November 1, 2009. Retailers and land-lease communities that are involved in home sales who assist customers with applications for home loans are covered under the rule.
Covered businesses are required to have a compliance program that satisfy the following:
(a.) Identify relevant patterns, practices and specific forms of activity that are red flags signaling possible identity theft and incorporate those red flags into your program;
(b.) Detect red flags that have been incorporated into your program;
(c.) Respond appropriately to any red flags that are detected to prevent and mitigate identity theft; and
(d.) Ensure that your program is updated periodically to reflect changes in risk from identity theft.
The rule states the program developed must be appropriate to the size and complexity of the financial institution or creditor and the nature and scope of its activities. The FTC website contains extensive information on how to comply with the Red Flags Rule. The site contains a How To Guide for Businesses, a Getting Red Flags Ready video and Do-it-Yourself Template for Low-Risk Businesses. Click the following link to access these resources. http://www.ftc.gov/redflagsrule
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