Is Red Flag #20 applicable to Home Equity Line of Credits?


20. A new revolving credit account is used in a manner commonly associated with known patterns of fraud patterns. For example:
a. The majority of available credit is used for cash advances or merchandise that is easily convertible to cash (e.g., electronics equipment or jewelry); or
b. The customer fails to make the first payment or makes an initial payment but no subsequent payments.

Just to ask what your regulator is likely to ask - Why wouldn't these parts apply to a HELOC?

Sorry I forgot to include the specific example I was referring to:

20. A new revolving credit account is used in a manner commonly associated with known patterns of fraud patterns. For example:
a. The majority of available credit is used for cash advances or merchandise that is easily convertible to cash (e.g., electronics equipment or jewelry);

I would assume we wouldn't be obligated to determine what the merchandise purchsed was. I would think this is only applicable to credit card accounts.