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Friday, June 26, 2009

New Federal Identity Theft Laws Puts Employers At Risk

Identity Theft Seminar Offered Regarding FACTA and the New “Red Flags Rule”

Identify theft is one of the fastest growing crimes, and it is reported that 1 of every 4 Americans will suffer some form of identify theft.

The US government passed new laws recently that places responsibility squarely on the shoulders of companies to protect their employees’ and their customers’ personal information. Consequently business and/or business owners are liable to ensure that proper steps are taken to protect the identities of their employees and customers.

Starting August 1, 2009, millions of small businesses that extend credit or defer payments for goods and services will be subject to a new set of rules under the Fair and Accurate Transaction Act aimed at helping curb identify theft. The new rules — known as the FACTA Red Flags Rules — are basically federally mandated precautions certain businesses must take to protect customers from identity theft crimes.

Whether it is social security numbers, check information, credit card information, medical data, or the like, if it is mishandled, lost or stolen, it can have a serious impact on the business.

Legions of small businesses that will now be covered — including auto dealers, jewelers, furniture companies, mortgage brokers, doctors, dentists and many others — are still unaware of this looming regulatory issue. Business owners who are aware are most likely confused about what they’ll have to do. And forget about an extension. The Federal Trade Commission (FTC), the enforcing agency, already stretched the compliance deadline, originally set for last November.

The coming FACTA Red Flags Rules require covered businesses to create a process for detecting so-called “Red Flags” in identity verification, such as:
  • Discrepancies in address history
  • Fraud alerts on credit reports
  • Suspicious use of Social Security numbers
  • Inactive accounts that suddenly become active
  • Credit-freeze notifications
  • Credit reports with suspicious activity patterns
  • Notices from identity theft victims or law agencies, among others.
A number of consulting firms offer guidance on how to comply with the new FACTA Red Flags Rule. One such company is The Risk Management Group. Village Bank and The Risk Management Group will be holding an Identity Theft Seminar on June 30, 2009 at the Village Bank Community Room, 15521 Midlothian Turnpike. The Seminar runs from 7:30 – 8:30 AM and is free of charge. For additional information and to register contact Richard Swed at or call 804-840-2918.