Identity Theft Rules
Will the new identity theft rules reduce fraudulent ID attempts? Order your annual free credit report to check for fraud and ID theft and; if so, consider placing a credit freeze.
New 'red flag' guidelines require financial institutions to monitor for fraud, and to make sure people are who they say they are. ID authentication will be the main focus. Red flag rules require financial institutions and creditors to establish a written program to "detect, prevent and mitigate identity theft in connection with the opening of certain accounts or existing accounts," according to a Federal Trade Commission report.
The rules list over two dozen examples of suspicious behavior that financial institutions and creditors should consider as 'red flags'.These include: the presentation of altered documents, a suspicious address change, a fraud alert on a credit report and other unusual account activities. The objective is to prompt banks and creditors to go into "authentication mode" and determine whether fraudsters are trying to apply for credit in someone else's name or to hijack someone else's accounts.
The red flag rules stem from the Fair and Accurate Credit Transactions Act of 2003. Proponents say the rules will standardize how credit-issuing entities respond to suspicious activities regarding accounts. Financial institutions and creditors must update their programs periodically to handle new threats as they emerge.
To whom red flag rules apply: The Federal Trade Commission says financial institutions and creditors who "offer or maintain covered accounts" must implement a red-flag program.
According to Pavneet Singh, an FTC spokeswoman, a 'covered account' is defined as: financial institutions and creditors like banks, credit unions, auto dealers, mortgage brokers, utility companies and telecommunications companies. Credit reporting agencies are exempt from the red-flag rules, but at least one, Experian, is getting involved at some level. In February, Experian hosted a Web seminar on the rules and attracted more than 700 clients.
How red flag rules will help you: Financial employees may be more vigilant in spotting identity fraud, while those banks and creditors with sloppy identity theft and fraud prevention programs will eventually be exposed by litigation and negative publicity.
Six agencies were involved in drafting the rules:
- Treasury Department's Office of Thrift Supervision
- Office of Comptroller of the Currency
- FDIC
- FTC
- National Credit Union Administration
- Federal Reserve System
Actions that should trigger a red flag: The rules are designed to fill the cracks in the system through which ID thieves could fraudulently pilfer the identities of other people for their personal gain.
- A fraud alert included with a consumer report
- A notice of a credit freeze in response to a request for a consumer report
- A consumer reporting agency providing a notice of address discrepancy
- Unusual credit activity, such as an increased number of accounts or inquiries
- Documents provided for identification appearing altered or forged
- A photograph on ID inconsistent with appearance of customer
- Information on ID inconsistent with information provided by person opening account
- Information on ID, such as signature, inconsistent with information on file at financial institution
- An application appearing forged or altered or destroyed and reassembled
- Information on ID not matching any address in the consumer report
- A Social Security number has not been issued or appears on the Social Security Administration's Death Master File, a file of information associated with Social Security numbers of those who are deceased
- A lack of correlation between the Social Security number range and the date of birth
- Personal identifying information associated with known fraud activity
- Suspicious addresses supplied, such as a mail drop or prison, or phone numbers associated with pagers or an answering service
- A Social Security number provided matching that submitted by another person opening an account or other customers
- An address or phone number matching that supplied by a large number of applicants
- The person opening the account unable to supply identifying information in response to notification that the application is incomplete
- Personal information inconsistent with information already on file at a financial institution or creditor
- Person opening account or customer unable to correctly answer challenge questions
- Shortly after a change of address, creditor receiving request for additional users of account
- Most of available credit used for cash advances, jewelry or electronics, plus customer fails to make first payment
- A drastic change in payment patterns, use of available credit or spending patterns
- An account that has been inactive for a lengthy time suddenly exhibiting unusual activity
- Mail sent to customer repeatedly returned as undeliverable despite continuing transactions on an active account
- A financial institution or creditor notified that customer is not receiving paper account statements
- A financial institution or creditor notified of unauthorized charges or transactions on customer's account
- A financial institution or creditor notified that it has opened a fraudulent account for a person engaged in identity theft
More resources:
Fraud ID Theft Credit Monitoring
Free Identity Theft Help
Experian Credit Report ID Theft Fraud Prevention
Identity Theft
Personal Privacy Identity Theft Protection
Identity Theft ID Patrol
ID Identity Theft Scams
Scams Fraud Identity Theft Warning
Self-Help Identity Theft Protection
Identity Theft Scam Protection
Fight Identity Theft
Identity Theft and Fraud
Identity Theft Protection
ATM Debit Card Fraud Tips
Visa Risk Manager Helps Reduce Credit Card Fraud
Visa ATM Transaction Fraud Detection
How to Place a Fraud Alert on Your Credit Report
Fraud and Credit Scams Target Debt People
Mortgage Foreclosure Fraud
FDIC Email Fraud
Investment Scams and Investing Fraud
 Share this Financial Article with a Friend - click here
Webmasters: Free Financial Content for Your Website!
Multiple ways to use our financial content:
1) You can use our RSS Feeds for automatic insertion and updates
2) You can simply link to this article
3) You can copy/paste the HTML code below (do not remove any links).
|
Personal loan and credit card resource serving millions of good and bad credit U.S. consumers.