Learn About Red Flag Compliance

Our red flag compliance identity verification software can be used alone or on a single pc and can be used by one employee or by hundreds of employees across the country. It is designed to:

Assist your company in becoming red flag complaint

Avoid risky transactions

Protect your company data

Prevent fraud and the resulting loss of revenue

Red Flag Becomes Effective November of 2009!

The Red Flags Rule which becomes effective November of 2009 requires many businesses and organizations to implement a written Identity Theft Prevention Program designed to detect the warning signs (or red flags) of identity theft, take steps to prevent the crime and mitigate the damage it inflicts.

As many as nine million Americans have their identities stolen each year and the Federal Government passed the red flag compliance rules to ensure that all businesses involved in the financial industry or companies extending credit implement certain procedures to be on the lookout for possible identity theft signs.

What is the red flags rule?

The Red Flag Compliance rules sets out four elements for which your company must comply:

1. Your company program must include reasonable policies and procedures to identify the red flags of identity theft. Red Flags are suspicious patterns or practices or specific activities that indicate the possibility of identify theft. For example if a customer provides an ID that looks altered or fake this would be a red flag.

2. Your company program must be designed to detect the red flags that you have identified. For example if you have determined that fade ID’s are a red flag in your industry then you must have procedures in place to detect possible fake ID’s.

3. Your program must spell out appropriate actions you will take when you detect the red flags.

4. Because identity theft is an ever-changing threat you must address how you will re-evaluate your program periodically to reflect new risks from this crime.

Just putting you program down on paper does not indicate red flag compliance. That’s why red flag compliance sets out requirements on how to incorporate your red flag compliance program into your daily operation of business. Your red flag compliance program must be approved by your board of directors or if you do not have a board, approval is up to an appropriate senior-level employee. Your program must state who is responsible for implementing and administering it effectively. Your program must also include appropriate staff training.

Who must comply with the red flag compliance rule?

Financial Institutions - Any financial institution that holds a consumer transaction account

Banks

Credit Unions

Savings and Loans

Creditor – Businesses that defer payment for goods or services or bill customers later.

Utility companies

Health care providers

Telecommunications companies

Automobile Dealers

Mortgage Companies

Finance Companies