FTC Red Flags Rule-Protecting Against Identity Theft

Previously published in LeasingLaw, ELT Magazine

Identity theft, whereby thieves use people's personally identifying information to open new accounts and misuse existing accounts, is a growing problem. Following the Fair and Accurate Credit Transactions Act of 2003 (16 CFR §681.2), the Federal Trade Commission (FT C), working with other federal agencies including federal bank regulatory agencies and the National Credit Union Administration, issued regulations, known collectively as the "Red Flags Rule," which require financial institutions and creditors to develop and implement written programs to prevent identity theft. The programs must identify, detect, and respond to warning signs, or "red flags," that could indicate identity theft.