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Security Regulations
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Red Flag Rules
The Red Flags Rule 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 in their day-to-day operations.
- Applies to: Anyone who arranges for or extends credit or payment terms, or who provides products or services and bills or invoices the customer.
- Penalties, Fines: Up to $3,500 per violation, plus attorneys fees. FTC can seek both monetary civil penalties and injunctive relief for violations. Allows consumers the right to recover actual damages.
- The expression "red flag" signals "Danger: Be alert to problems ahead." Under the Red Flags Rule, which will go into effect on January 1, 2011, certain businesses and organizations are required to spot and heed the red flags that often can be the telltale signs of identity theft. To comply with the new Red Flags Rule — enforced by the Federal Trade Commission (FTC), the federal bank regulatory agencies, and the National Credit Union Administration (NCUA) — you must develop a written “red flags program” to prevent, detect, and minimize the damage from identity theft. Enforcement of the Red Flags Rule begins for all businesses on January 1, 2011.
Additional Information:
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