Lurking Guidance in Legislation to Protect Identity

Risk Advisory/Internal Audit

By Donald Owens

You are most likely in the majority that is unaware of the lurking “Red Flag” rules embedded within the Fair and Accurate Credit Transactions (FACT) Act; but your unfamiliarity will not last for long. The rules, intended to reduce the risk of identity theft, apply to several industries. In general, organizations subject to the rules are those that provided goods and/or services to customers in advance of receiving payment. The rules outline a minimum of 26 “red flags” that organizations need to actively monitor as part of their business practices. The intent is to identify consumers who are attempting to falsify their identifies in an attempt to unlawfully obtain goods and/or services. November 1st was the effective date by which organizations subject to the “Red Flag” rules were to have implemented policies, procedures and practices to monitor for and identify such activities. If you do not know if your company is subject to these rules or have yet to establish needed monitoring practices, now is the time to act. To understand what is needed to create your action plan, contact Eric Wright.

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