Petrogram - Fall 2010 - (Page 18)
Are You Red Flag Compliant?
dentity thieves drain accounts, damage credit and can leave victims deep in debt. The cost to businesses – left with unpaid bills racked up by scam artists – is equally staggering. To help combat identity theft, the federal banking agencies and the FTC jointly issued the Red Flag Rule. Bo Orr The rule requires that certain busiFederated nesses develop a written program to Insurance spot the “red fl ags” of identity theft and respond if those situations present themselves. The rule became effective on January 1, 2008, and mandatory compliance was extended to December 31, 2010.
and encompassing, it covers a large segment of the U.S. business community – and may include individual small businesses. Businesses are required to evaluate their activities and services to determine if they fit the financial institution or creditor definitions – and if they maintain covered accounts. If your business offers financing or helps consumers get financing from others, it is quite possible that you meet the “creditor” definition and are subject to the new rule. If so, you are required to have compliance plans in place to secure nonpublic information to protect against identity theft.
Who Must Comply? The Red Flag Rule applies to financial institutions and creditors that maintain covered accounts. Since the rule is broad
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What Are the Program Requirements? The Red Flag Rule requires businesses and organizations that meet their criteria to develop and implement an Identity Theft Prevention Program (ITPP) to combat identity theft. The ITPP must: • Include reasonable policies and procedures to identify relevant patterns, practices and specific forms of activity that are “red flags” signaling possible identity theft. • Detect red flags that have been identified. • Include procedures for responding appropriately to any red flags that are detected in order to prevent and mitigate identity theft. • Ensure the program is updated periodically to reflect changes. How Do You Get Started? The Federal Trade Commission website offers valuable information to help you determine if the Red Flags Rule affects your operation. If you think it does, and you haven’t started a program yet, the best way to comply is to get guidance from an attorney or to hire a compliance company to oversee your program. ❍
This article is intended to provide general recommendations regarding risk prevention. It is not intended to include all steps or processes necessary to adequately protect you, your business or your customers. You should always consult your personal attorney and insurance adviser for advice unique to you and your business. ©2010 Federated Mutual Insurance Company. All rights reserved.
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Table of Contents for the Digital Edition of Petrogram - Fall 2010
Petrogram - Fall 2010
Welcome, New Board Members
FPMA Rolls Out Newly Branded Sunshine Food and Fuel Expo at 2010 Convention!
Your FICO Score
Protect Your Business
Out and About
Index of Advertisers/Advertiser.com
Petrogram - Fall 2010
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