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Red Flag Identity Theft Rules
Question: What are the new Red Flag Identity Theft Rules? Who needs to be concerned with these regulations and why?
Answer: The Red Flag Identity Theft Rules are a result of the 2003 Fair and Accurate Credit Transactions Act (FACTA) that amended the Fair Credit Reporting Act (FCRA). Section 114 of FACTA requires financial institutions to establish reasonable procedures for identifying identity theft.
The final rules provide financial institutions with a fair amount of flexibility in establishing their own internal compliance programs, but there are a few mandatory provisions that must be included in any compliance program. For example:
- Each financial institution must create, and keep updated, a written identity theft prevention program and
- Financial institutions must review discrepancies if addresses on applications conflict with those on credit reports
The final rule also lists 43 examples of identity theft red flags that financial institutions should consider incorporating into their Identity Theft Prevention Programs, but the adoption of these are not mandatory.
These rules come at a time when the Federal Trade Commission and banking regulatory agencies are questioning whether creditors are using adequate authentication tools. These Red Flag Rules will improve industry practices in the area and should continue to drive identity theft statistics downward. These regulations became effective on Jan. 1, 2008, and full institutional compliance is required by Nov. 1, 2008.
About Experian
Experian® is a global leader in providing information, analytical and marketing services to organizations and consumers to help manage the risk and reward of commercial and financial decisions. Combining its unique information tools and deep understanding of individuals, markets and economies, Experian partners with organizations around the world to establish and strengthen customer relationships and provide their businesses with competitive advantage.
For consumers, Experian delivers critical information that enables them to make financial and purchasing decisions with greater control and confidence. Clients include organizations from financial services, retail and catalog, telecommunications, utilities, media, insurance, automotive, leisure, e-commerce, manufacturing, property and government sectors.
Experian Group Limited is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. It has corporate headquarters in Dublin, Ireland, and operational headquarters in Costa Mesa, Calif., and Nottingham, UK. Experian employs approximately 15,500 people in 36 countries worldwide, supporting clients in more than 65 countries. Annual sales are in excess of $3.8 billion (£1.9 billion/€2.8 billion).
For more information, please contact an Experian representative at 1 888 414 1120.
First published on BankersOnline.com 2/04/08
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