Financial Institutions and Creditors are Subject to Identity Theft Red Flag Legislation January 1, 2008 with a Mandatory Deadline of November 1, 2008
BRENTWOOD, Tenn., Jan. 2 /PRNewswire/ -- With only ten months to be in compliance with Section 114 of FACTA (Fair and Accurate Transactions Act), also known as the "Red Flag Rules," financial institutions and other creditors are scrambling to create a written plan for detecting and responding to transaction patterns and practices that could be signals of identity theft.
"We created this website, (http://www.redflagrules.net)" said Scott Smith, NXG co-founder and President, "to boil down the requirements of the Red Flag Rules into an easy to access format, and more importantly to provide practical insight on how to meet the requirements."
The joint task force consisting of regulators for both banks and credit unions, along with the Federal Reserve Board and the Federal Trade Commission put the final requirements of Red Flag on the fast track when it passed the final rules on October 31st. Its purpose is to create a national standard for organizations who manage customer accounts, requiring them to proactively look for evidence of identity theft and to act quickly to prevent or lessen the damage to consumers who may be victimized. They must also have a written plan for how they will detect each Red Flag and, when detected, how they will respond. This includes notifying the customer if any risk of identity theft is present.
For consumers this is an important step forward to defend against identity theft. For financial institutions and creditors it places additional responsibility for finding identity theft squarely on their shoulders. However, by finding identity theft earlier, and taking proactive steps to stop the damage, it should lessen financial losses to these organizations. According to a February 2007 Javelin Identity Fraud Survey Report, $49 billion dollars was lost to identity thieves in 2006.
Just weeks after the final regulations were announced on October 31st, NXG launched http://www.redflagrules.net to provide a quick resource for organizations that fall under the umbrella of the Red Flag Rules. In addition, NXG provides a look at what a "Best in Class" solution to Red Flag might include.
"We know what is under the covers," said Scott Smith. "At http://www.redflagrules.net we provide guidance on how to select a services provider so you will end up on the right side of compliance as it happens. And more is coming."
About NXG Strategies, LLC
As an independent consultant and one of the nation's pioneers and
foremost authorities in the field of identity theft and corporate risk
mitigation, NXG Strategies is the only company in the country that has
built remediation programs from the ground up and yet remains independent
of any solutions provider. For more information about NXG Strategies, LLC
visit http://www.nxgstrategies.com and http://www.redflagrules.net.
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|SOURCE NXG Strategies, LLC|
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