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Enforcement
Deadline
August 1st
2009
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STOP Identity Theft
with the FTC's Red Flags Rule
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Identity Theft Red Flags
Congress passed the Fair and Accurate credit Transaction Act of 2003 ("FACTA") in response to the widespread concerns and misuse of consumers' personally identifiable information (PII), private health information (PHI), and electronic data, with an urgency focused on the escalating problem of identity theft. Financial institutions and creditors are now required to develop and implement a written "Identity theft Prevention program" under the new "Red Flags Rule". The Red Flags Rule is part of FACTA. Under this rule, financial institutions and creditors with covered accounts must have identity theft prevention programs in place to identity, detect, and response to patterns, practices, or specific activities that could indicate identity theft. Click here to read more ...
Click any of the blue text below to learn more.
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Retail Businesses, Real Estate Industry,
Associations & Non-Profit Organizations
The Federal Trade Commission (FTC) works for consumers and businesses to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. In an effort to curtain "the fastest growing crime in America" - identity theft, the new Red Flags Rule includes not only financial institutions, but also any "creditors" who hold "covered accounts: and those that show a foreseeable risk of identity theft.
Accepting credit cards as a form of payment does not, in and of itself, make an entity a creditor. Some examples of retail businesses, associations and non-profit organizations that fall under the definition of "creditors" are mortgage brokers, real estate agents, law firms, civic associations, non-profit and government entities that defer payment for goods or services. The FTC has estimated as many as 11 million "creditors" will have to comply with the Rule, and has stated that the Rule is also applicable to non-profit organizations, professional service providers such as lawyers, mental health providers, veterinarians, publishing companies, athletic clubs, home improvement contractors, bicycle stores as well as furniture, carpet and jewelry stores just to name a few. Click here for more...
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With the turbulent Real Estate Industry identity thieves and fraudsters have been working over-time. Many real estate agents, investors, property owners and those serving the Real Estate Industry such as contractors, electricians and home improvement centers, are not fully aware of how the Red Flags Rule effects the way they do business. Unlike many of the other industries affected by the Red Flags Rule, your inustry is impacted by these regulations on many levels and by a wide variety of "red flags" Read more...
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Medical & Health Care Services
Governed by the Federal Trade Commission (FTC), the Red Flags Rule Holds businesses accountable for protecting the PII (medical, financial, legal, professional and personal, etc...) of consumers. If a service provider allows a consumer, client, or patient to defer payments of a bill, this deferral of a debt is considered credit for purposes of the regulation, even if there is no finance charge and no agreement for payment installments.
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The FTC's regulations to combat identity theft applies to the healthcare industry which includes physician practices, hospitals, laboratories ... and any others who extend "credit" or defer payment for services to their patients. this includes heathcare organizations, dentists, chiropractors and any other types of physician and alternative medical and health care offices. Most health care accounts or charges are not paid in advance of service, but even if a provider generally provides care on a prepaid basis, accepting patient payments plus insurance payment amount to a multiple payment account that would make the provider subject to the Red Flag regulations. |
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Thus, the FTC believes that professionals, including physicians, who regularly bill their clients, customers and patients for their services after those services are rendered, are "creditors" under the Red Flags rule. Being HIPAA compliant does not mean your practice is Red Flags compliant. Furthermore ... Congress would need to exclude physicians explicitly from FACTA's definition of creditor for them to be excluded from the Red flags rule. Thus, compliance is Mandatory by May 1, 2009. Click here for more ... |
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Transportation: Auto, Motorcycle, Watercraft
Motorsport & RV Industries
As part of a mandate from FACTA, auto, motorcycle, watercraft, and other motorsport businesses and dealerships must establish a written Red Flags Identity Theft Prevention Program. The new Red Flags Law became effective on January 1, 2008 with an original mandatory compliance date of November 1, 2008, however, the FTC suspended the enforcement deadline until May 1, 2008. Dealerships failing to create and maintain a good faith compliance effort around a Red Flags program run the risk of fines for each violation of the law and exposure to a public relations disaster.
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Licensed autormobile, Motorcycle and water-sport dealerships who assist with or offer financing to their customers need to become RED FLAG compliant NOW |
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We are the only Auto, Motorcycle, and Water-sport school offering an in-person class for dealer owners and management to teach compliance with the new federal law known as the Red Flag Rule.
We are the only Red Flags rule provider who will teach you to turn your legally mandated Red flags program into an income generating stream for your business while assisting you with your compliance. Click here to learn more...
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Education Industry
According to the Red Flag rule, colleges, universities, and other educational facilities and organizations also fall under the definition of "creditors". Thus, these entitles must also abide by the Red Flag Rule and the authority of the FTC. A covered account is an account used mostly for personal, family, or household purposes and involves multiple payments or transactions. Covered accounts include credit accounts, loans, checking accounts, and saving accounts and the payment transactions associated with tuitions and other expenses associated with the education industry.
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Financial Industry
The FTC and the federal financial regulatory agencies, developed the Red Flags rule under the Fair and Accurate Credit Transactions Act 2003 (FACTA). The rule is designed to reduce the overall incidence and impact of identity theft. Under the Rule, financial institutions and creditors with covered account must have identity theft prevention programs to identify, detect, and respond to patterns, practices, o specific activities that could indicate identity theft. The rule applies to creditors and financial institutions.
Federal law defines a creditor to be: any entity that regularly extends, renews, or continues credit; any entity that regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit. Financial institutions include entities that offer account that enable consumers to write checks or to make payments to third parties through other means, such as other negotiable instruments or telephone transfers.
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Utilities and Municipalities
According to the Red Flag Rule, utility companies such as gas, water, electric, heating, telephone and cellular services, all of which create and operate as creditors, according to the FACTA (Fair and Accurate Credit Transaction Action) definition, utilizing covered accounts, must have an identity theft prevention program in place.
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As each of these companies and organizations allow consumers to open and operate an ongoing account the Red Flags Rule applies to any businesses, companies, organizations, and even municipalities which operate such utilities and multiple payment accounts. |
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Similar to all other "creditors" and financial institutions these companies must also implement a Board of Directors' approved Red Flags Identity Theft Prevention Program, train their staff with ongoing educational resources and provide their consumers with "Best Practices for Identifying, Detecting, Preventing and Mitigating Identity Theft." More...
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