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ID theft

All about how it happens and how you can keep it from happening to you.

FTC "Red Flag Rules" August 1 deadline

There’s been a lot of confusion about the FTC’s definition of creditor, with many people assuming it applies only to financial institutions, mortgage brokers and finance companies. But it turns the definition is much broader.

If you’re still confused about whether or not the Federal Trade Commission’s “Red Flag Rules” apply to your business, here’s a simple quiz to help you sort it out: Do you provide goods or services and defer payments or accept partial payments toward the total balance? If so, you’re a creditor and have 10 days to meet the FTC’s August 1 deadline and get your ID theft prevention program together.

If you own a dry cleaning business that allows customers to run monthly tabs, or you’re an attorney who accepts a down payment for total services to be rendered, you’re a creditor. Orthodontists who set up payment plans for kids’ braces? Yep.

The good news is most creditors are small businesses, and meeting the requirements shouldn’t be a huge undertaking. The red flags are only common sense warning signs; they just need to be documented and your employee trained.

What to watch for

  • Be on the lookout for fake documents. Does the photo look authentic and match the customer’s appearance? Does the address match the information you have on file?
  • Watch for unusual use of an established account. If a normally reliable customer is months late on payments, or making uncharacteristically expensive purchases, it might be a sign of account takeover.
  • Fraud alerts and credit freezes are placed on credit files by consumers who are already ID theft victims, or think they might become victims—for instance, someone who’s lost a wallet. If you run a credit check on someone and find a fraud alert or freeze, take extra steps to confirm identity.

All that’s left is to put your plan in writing, discuss it with employees and determine who among your staff will be the go-to person.

Published Jul 21 2009, 03:05 PM by IdentityTheft
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