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Many US companies have not heard about the new Federal law that comes into effect on November 1, 2008, or they do not know if they are need to establish this law in their business. From the research I have done, it looks like every company out there pretty much need to have Red Flag compliance, as long as you extend credit, like Gyms do and some select businesses that have membership services. Most Retail stores, grocery stores, and businesses like pizza parlors will not need to be compliant. The Red Flag (Section 114) and the Reconciling Address Discrepancies (Section 315) guidelines of the Fair and Accurate Credit Transactions Act (FACTA) are the laws that will be enacted by November 1, 2008.
I am here to explain who should be worried and getting this program into action before Nov. 1. Now who should be gathering information about Red Flag compliance is: financial institutions and creditors with covered accounts. Which means:
1. A transaction account is a deposit or other account from which the owner makes payments or transfers. Transaction accounts include checking accounts, negotiable order of withdrawal accounts, savings deposits subject to automatic transfers, and share draft accounts.
2. A creditor is any entity that regularly extends, renews, or continues credit; any entity that regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit. Accepting credit cards as a form of payment does not in and of itself make an entity a creditor. Creditors include finance companies, automobile dealers, mortgage brokers, utility companies, and telecommunications companies. Where non-profit and government entities defer payment for goods or services, they, too, are to be considered creditors. Most creditors, except for those regulated by the Federal bank regulatory agencies and the NCUA, come under the jurisdiction of the FTC.
3. A covered account is an account used mostly for personal, family, or household purposes, and that involves multiple payments or transactions. Covered accounts include credit card accounts, mortgage loans, automobile loans, margin accounts, cell phone accounts, utility accounts, checking accounts, and savings accounts. A covered account is also an account for which there is a foreseeable risk of identity theft, for example, small business or sole proprietorship accounts.
You can see this would mean even down to the Day Care Center, that extend credit, where your children go to; they take credit cards and your personal information, so they would have to be Red Flag compliant. The gym you go to at least once a week and pay a membership at, they all need to be Red Flag compliant.
You are probably wondering why they would have to be compliant, you have seen on the evening news, company information on clients being dug out of trash bins. I have seen doctor offices disposing their records of clients in trash dumpsters, even small mortgage companies have been caught dumping their old files out into dumpsters. The government has seen this happen and also wants to put a stop to such recklessness and have companies take responsibility for such action and have a new action taken by disposing such materials the right way or be fined. This was just one example of why this law was implemented.
There are 26 Flags that are in the FACTA, some will apply to all companies and then there are the other flags that are more specifically for companies like mortgage brokers, financial institutions, and insurance companies and so on. Not every flag will be used in all the businesses, that is why there are 26 flags so they can be tailored to the company.
The penalties are really rigid; fines can be from $2500.00 to $11,000.00 per incident if you are not Red Flag compliant. So you can see they are serious about these companies that are half witted with our information and expect them to get compliant by November 1, 2008.
The Red Flags Rules provide all financial institutions and creditors the opportunity to design and implement a program that is appropriate to their size and complexity, as well as the nature of their operations. Guidelines issued by the FTC, the federal banking agencies, and the NCUA should be helpful in assisting covered entities in designing their programs. A supplement to the Guidelines identifies 26 possible red flags. These red flags are not a checklist, but rather, are examples that financial institutions and creditors and businesses may want to use as a starting point. They fall into five categories:
1. alerts, notifications, or warnings from a consumer reporting agency;
2. suspicious documents;
3. suspicious personally identifying information, such as a suspicious address;
4. unusual use of, or suspicious activity relating to, a covered account; and
5. notices from customers, victims of identity theft, law enforcement authorities, or other businesses about possible identity theft in connection with covered accounts.
I have found a company that can help with your company get started and know what flags would fit your business, what procedure your company would take in disposing the old information and how you secure the client information your business has. They give a jump start program, which can direct your business in becoming compliant; they are not as expensive as lawyers and will give you the proper guides and tools for becoming Red Flag compliant. Read my Bio and click on the Red Flags compliant link.
Carolyn Roome
303-816-7112
http://getyourlifebackonline.com
http://mountaingirlllc.com
Credit Repair 100% money back guarantee! $500.00 No Monthly Fees, No hidden charges.
Learn more about Red Flags compliance Red Flag Compliance information Everyone company or individual needs to know more!
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