After five long years, the November deadline for financial institutions and creditors to comply with Red Flag Rules is just around the corner. The Red Flag Rules were established as part of the Fair and Accurate Credit Transaction Act (FACT Act) of 2003 as a program to detect, prevent and mitigate identity theft.

The first step in compliance is the recognition of “red flags,” or warnings listed by the Federal Trade Commission. The list includes:

• Fraud alert or credit freeze attached to a credit report (this doesn’t mean you’ll be turned down for credit, only that creditors must take steps to confirm your identity)
• Address discrepancy (when you review your credit report, make sure it reflects your current address)
• Unusually high number of new accounts of credit inquiries
• ID seems to be phony, or photo doesn’t match applicant’s appearance
• Social Security number is inactive (i.e., belongs to someone deceased, has never been issued, belongs to someone other than applicant)
• Change of address followed by request for addition of new account users
• Credit card statements returned as undeliverable, but transactions on account continue

Many of these warning signs should be simple common sense, but apparently common sense isn’t always common. (more…)

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