Ive heard about so called red flag rules. What are they and do I need to comply with them?
The “red flags rule” was the name given to the written Identity Theft Prevention Program which was mandated last year by the Federal Trade Commission and the various federal banking agencies. These rules require, in part, that all mortgage brokers, mortgage bankers and escrow agencies design and implement ID theft prevention programs that are appropriate to their size and complexity, as well as the nature of their operations. The implementation date has now been extended to November 1, 2009. For licensees who have not yet adopted ID theft prevention programs, the guidelines issued by the FTC should be helpful in assisting licensees in designing them. A supplement to the identifies 26 possible red flags. These red flags are not a checklist, but rather, are examples that licensees may want to use as a starting point. As part of the Division’s examination process, the licensee’s “red flag rules” must be made available for review.
