Monday, May 4, 2009

Red Flag 101

For those of you that might not be knowledgeable about "Red Flag", the Red Flag rules are our government's latest response to the identity theft crisis.

According to the rules, any company that extends credit in any fashion, must comply by implementing a complete program by August 1, 2009. What does this mean for the consumer? Well, hopefully it will mean that you can worry a little less about having your identity stolen; however, the ultimate responsibility rests with you. Under the rules the covered entities must put into place a program that can do three things:

1. Identify potential identity theft threats
2. Respond to those threats through an established set of guidelines and policies
3. Report the threats to the appropriate authorities.

Each covered entity must have a program in place that is approved by their board of directors and must appoint a "Red Flag Officer".

The Federal Trade Commission is the governing authority over the program. Each violation by a covered entity will be worth a penalty of $2500 as the rules stand right now.

Please feel free to post any questions or comments here and I will do my best to respond quickly and accurately.

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