In response to the growing threat of identity theft, the United States Congress passed the Fair and Accurate Credit Transactions Act of 2003 (FACT Act). This amendment to the Fair Credit Reporting Act charged the Federal Trade Commission with proclaiming rules regarding identity theft.
On November 7, 2007, the Federal Trade Commission promulgated the final rules, known as the "Red Flag" Rules which have an effective date of November 1, 2008. These rules require certain municipal departments to enact an Identify Theft Prevention program by the effective date of November 1, 2008.
The Fair and Accurate Credit Transactions (FACT) Act, passed by Congress in 2003 was passed to set standards for guarding customer information. In order to create a uniform system to protect consumer credit information in compliance with the FACT Act, the Federal Trade Commission (FTC) has issued final rules and regulations for certain financial institutions and creditors known as the "Red Flag Rules." Red flags are warning signs, including patterns, practices, or specific activities, that indicate the possible existence of identity theft. The final rules require financial institutions and creditors, including utilities, to develop and implement a written Identity Theft Prevention Program.
The program must include reasonable policies and procedures for detecting, preventing, and mitigating identity theft. The program must be appropriate to the size and complexity of the creditor and the nature and scope of its activities. It should enable a financial institution to:
- Identify relevant patterns, practices, and specific forms of activity that are "red flags" signaling possible identity theft, and incorporate those red flags into the program;
- Detect red flags that have been incorporated into the program;
- Respond appropriately to any red flags that are detected to prevent and mitigate identity theft; and
- Ensure the program is updated periodically to reflect changes in risks from identity theft. Please click here to review GWP's Identify Theft Prevention Program.