FACT Act "Red Flag" Rules

FACT Act "Red Flag" Rules

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We help companies protect data, comply with evolving regulations, and respond to investigations and litigation.
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Is your company prepared to comply with the "red flag" rules implementing Sections 114 and 315 of the Fair and Accurate Credit Transactions Act of 2003 ("FACT Act")? On November 1, 2008, those rules will require many companies to identify and respond to account activities that are possible indicators ("red flags") of identity theft. And the rules will be enforced against a wide variety of other companies beginning on May 1, 2009. If you think that your company is not subject to the rules, think again. The regulations apply to banks -- but also apply to any financial institution or creditor that holds a covered transaction account -- a broad classification that includes companies such as automobile dealers, utility companies, mortgage brokers, telecommunications companies, finance companies, and non-bank financial services that provide money market accounts. According to the Federal Trade Commission, the rules are likely to affect over 11 million creditors. In our recent Email Alert, we offer some thoughts on the steps that these companies must take in order to comply with the "red flag" rules.

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