Don’t be Fooled with the Delay on Red Flags Compliance
by A Better understanding of Red Flags compliance and why the launch date was postponed is when
FTC starts audits they will be looking at the effectiveness of your Identity Theft program you have implemented and your third party relationships and what they are doing.
A Better understanding of Red Flags compliance and why the launch date was postponed is when FTC starts audits they will be looking at the effectiveness of your Identity Theft program you have implemented and your third party relationships and what they are doing. What kind of businesses or services have to be Red Flag compliant are: Financial Institutions, Credit Unions, Car Dealerships, Gyms that have memberships and monthly payments, Mortgage Brokers, Mortgage Lenders, Day Care centers, Health providers, Care Givers, any company that takes applications for credit even if they give it to another creditor or company for processing. Retail stores are not included in this but I bet the FTC will start something with that sooner or later.
The postponement of the implementation of Red Flag compliance, which should have started back November 1, 2008 was, the Health care providers and Health Care was not ready and FTC actually set the date for them to May 1, 2009 and the Financial Institutions and other entities such as Car Dealerships and Mortgage should have started their compliance back in November. The FTC will start auditing and they have been quoted saying that those companies other than health care industry should be compliant and if they aren’t they will wish they would have been.
FTC is very serious about Red Flags and will be serious with their fines and all the audits you will have to go though if you get caught in this mess. Mandatory compliance required by “financial institutions” or creditors by November 1, 2008. The delay in audits by the FTC to May 1, 2009 did not stop the requirement to mitigate address discrepancies or proper document verification. The FDIC did not delay auditing of the banks and organizations under their control. This is also about “risk reduction” and asset protection. Direct responsibility by a member of the board of directors, a senior manager or a committee of the board. This law was legislated to halt or slow ID Theft at the retail point of contact.
The Types of Red Flags are: Section 1 - Alerts, Notifications or Warnings from a Consumer Reporting Agency. Section 2 - Suspicious Documents. Section 3 - Suspicious Personal Identifying Information. Section 4 - Unusual Use of, or Suspicious Activity Related to the Customer. Section 5 - Dealer Red Flags Noted or those related by a Customer or consumer reporting agency.
It is very important that you get your company in compliance! There are too many things that can go wrong and you don’t need to be stuck with huge fines, civil litigation, frequent audits and who know what else. Red Flag compliance can be made easy for your company to comply. The biggest problem out there is the lack of education on what this means and how you need to implement it into your business structure.
I have found a couple of companies that do a great job teaching you and even getting the information and the compliance together for your company at a very good cost. And let me tell you with all the rules and regulations there are you really need to have someone or some company that can lead you along the right steps. There are also some perks to these companies having an area showing all the companies that are already Red Flags compliant and the general public can pick those companies or services that are ready and implementing the program. Being assured that the clients information is safe and sound.
Keep researching about your industry and see what Red Flags you will need to use. Make sure you have a direct person that will be in charge of the information and the appropriate actions will be taken if one of those flags come popping up. Do not feel secure if you use a Credit reporting service and they tell you that you are compliant when you use their service! That is utter nonsense and you need to check out that information to make sure it is true. You will find out that it is only one part of the puzzle and they have to be Red Flag compliant.
I would suggest you start compliance right away even the Health care providers. Keep those fines and suits away by starting now and be ready! The FTC is very serious and will be going after those companies that are not compliant.
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