The Fed is making a list and checking it twice. But, financial institutions must comply with that list well before Christmas. On Jan. 1, new regulations from the Federal Reserve Board went into effect requiring all banks and financial institutions to improve efforts to combat identity theft.
These Red Flag rules say that all financial institutions, including banks, credit unions, mortgage lenders, and more, that store consumer accounts to develop and implement identity theft prevention programs that will help combat ID theft in connection with new and existing accounts. Financial institutions must create “reasonable policies and procedures” for preventing ID theft, identify “red flag” signals of possible identity theft, and notify victims. With the compliance deadline Nov. 1, 2008, financial institutions have a mere 50 business days to fulfill seven requirements. Over the next few weeks we’ll be taking a closer look at the Red Flag rules’ seven main requirements, but for now, here’s the short list.
1. Initial Risk Assessment
2. Policies and Procedures Manual
3. New Account Authentication
4. Address Change Verification
5. Anti-Phishing Services
6. Staff Training and Program Implementation
7. Identity Theft Protection For All Consumer Accounts
