Federal Regulations Mandate Utilities Adopt Identity Theft Protection Policies

Congress enacted the Fair and Accurate Credit Transaction Act in 2003 to help combat rising identity theft crimes. The Federal Trade Commission (FTC) was enlisted by Congress to help combat identity theft by adopting regulations that would require creditors to develop policies to "red flag" identity theft involving their accounts or customer information. The "Red Flag Rules" adopted by the FTC impose three principle obligations on creditors. First, creditors must conduct a risk assessment to determine whether they offer accounts for which there is a reasonably foreseeable risk to customers of identity theft. Second, creditors who offer such accounts must adopt a written identity theft protection program that is designed to prevent and mitigate identity theft in connection with the opening of a covered account. The policy must be approved by the governing body and implemented by a designated employee. Finally, creditors must annually review the adopted program to