Risk Analysis: Identity Theft Alerts

Identity theft and fraud alerts will affect almost every job in the institution, in one way or another. One of the anomalies of this new process is that the alerts are most likely to be used in the lending departments. Lenders must look for identity theft alerts and military duty alerts before making final credit decisions or providing certain services to customers. Lenders, therefore, need to know where and when to look for identity theft information and what to do when an alert is in the consumer's file.

Other parts of the institution are involved in very different ways. While branch staff will from time to time encounter situations when an identity theft alert will affect their actions, branch staff will more often be the recipient of the information from the consumer that leads to the identity theft alert. This role is very different from the lender's role. The front line staff, whether branch staff or a call or customer service center, must recognize allegations of identity theft and take appropriate actions. This is potentially more complex than the decision-making role of the lender. It may also be riskier because liability and information safety depend on the ability of any customer contact staff to identify situations and act accordingly.

And then, of course, there is operations - the function that must exchange information with credit reporters and then maintain correct information on the system. Taking all these functions into account means that a primary element of FACT Act compliance is communication within the institution and clearly placed responsibilities. Just take a look at some key responsibilities in the chart below.

ca_v10n05_chart.pdf

Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 5, 4/05