Red Flags Rule | Overview & Categories | Identify Theft Prevention Programs and Policies

The Red Flags Rule was created by the Federal Trade Commission (FTC) for purposes of fighting identify theft and it generally applies to financial institution and creditors. As for a “Financial institution” it’s defined as a state or national bank, a state or federal savings and loan association, a mutual savings bank, a state or federal credit union, or any other entity that holds a “transaction account” belonging to a consumer.

As for a “creditor”, it applies to any entity that regularly extends or renews credit – or arranges for others to do so – and includes all entities that regularly permit deferred payments for goods or services. Thus, the Red Flags Rule sets out how certain businesses and organizations must develop, implement, and administer their Identity Theft Prevention Programs, which must include the following four basic elements:

  • Identify Relevant Red Flags
  • Detect Red Flags
  • Prevent and Mitigate Identity Theft
  • Update Program

Five (5) Categories for Red Flags Rules | Important Considerations for Businesses

Additionally, the Red Flags Rules provide all financial institutions and creditors the opportunity to design and implement a program that’s appropriate to their size and complexity, and specific for their business. Lastly, it’s important to note that “red flags” fall under the following five (5) categories:

  • Alerts, notifications, or warnings from a consumer reporting agency
  • Suspicious documents
  • Suspicious identifying information, such as a suspicious address
  • Unusual use of – or suspicious activity relating to – a covered account
  • Notices from customers, victims of identity theft, law enforcement authorities, or other businesses about possible identity theft in connection with covered accounts

Policies and are Critical for Red Flags Rules Compliance | Hundreds Available

FLANK offers comprehensive operational, business specific, and information security documents for immediate download as part of the FLANK21 set of industry leading policies, procedures, forms, checklists, templates, provisioning and hardening documents, and more. You’ll find a high-quality and well-written identity theft program policy template along with literally hundreds of other top-notch documents.

The FLANK21 set of documents is the culmination of thousands of hours of research and authoring of what’s without question some of the very finest operational and security documentation found anywhere today.  From implementing required policies and procedures relating to identity theft, along with putting in place comprehensive, enterprise-wide information security documentation, FLANK delivers, and in a big way.