Red Flag Rules Require Companies To Take Identity Theft Seriously

You may be surprised to that learn your business must comply with the new identity theft Red Flag Rules. Not only are credit card companies and financial institutions subject to these rules, but any company that regularly extends or merely arranges for the extension of credit is also subject to the rules. Thus, finance companies, mortgage brokers, automobile dealers, telecommunications companies, and utility companies, among others, will have to comply with the Red Flag Rules. If your company extends or arranges for the extension of credit, you have only until November 1, 2008, to become compliant with the Red Flag Rules.

Background

On December 4, 2003, the President signed into law the Fair and Accurate Credit Transactions Act ("FACTA"). FACTA was enacted by Congress to provide consumers with increased protection from identity theft. The regulations directed six agencies to jointly "establish and maintain guidelines...[that] identify patterns, practices, Red Flag