Feature Article
Mark Pribish
Is your Doctor, Dentist, Home & Auto Insurance Agent (and other creditor relationships) prepared for the new FTC Red Flags Rule?
By Mark Pribish
Vice President and ID Theft Practice Leader

While you and your family, as individual consumers are not required to be very familiar with Federal Trade Commission (FTC) Red Flags Rule (which goes into affect on November 1, 2009), you should be responsible with respect to knowing whether or not the companies and organizations that you have a "creditor" relationship with are prepared and in compliance with the new Red Flags Rule.

As a side note, I wrote this article to coincide with the August 1st Red Flags deadline - which has now been delayed three times since last November - which shows how difficult it is for businesses and organizations to protect our sensitive information from being lost or stolen.

According to the FTC, "the Red Flags Rule requires many businesses and organizations to implement a written Identity Theft Prevention Program designed to detect the warning signs - or "red flags" - of identity theft in their day-to-day operations."

You can visit the FTC website (http://www.ftc.gov/redflagsrule) to learn more about the new Red Flags Rule so that you can be educated in asking your doctor, dentist, home and auto insurance agent, along with other creditor relationships, about their information security policies, best practices, and how they safeguard your sensitive information.

The Red Flags Rule requires "creditors" under certain "covered accounts" to maintain a heightened alertness to numerous categories of "red flags" that may indicate that the consumer who is the rightful account holder is the victim of identity theft. If a red flag is triggered, the creditor must take steps to notify you and members of your family and correct any inappropriate information included in the creditor's records.

One of the best practice requirements included in the rule dictates that the staff of your doctor, dentist, home and auto insurance agent, etc. be trained to deal with safeguarding sensitive information, individual issues, and affected consumers.

That said, how do you know what business is a "creditor?" The short answer is any entity that accepts payment other than payment in full at the time of service is a creditor. Entities that only accept cash at the time of service are not creditors.

Examples of creditors can include the following:

  • Healthcare (e.g. doctor, dentist, hospital, physical therapy)
  • Telecom (phone company, cell phone company, cable TV company, direct TV company)
  • Utilities (gas, electric, water, trash)
  • Auto (auto dealers, auto finance companies, auto warranty companies)
  • Financial Institutions (banks, savings & loans, credit unions)
  • Insurance Companies (home & auto, life, health, supplemental)
  • Legal Services (law firms, pre-paid legal services, private investigators)
  • Financial Services (401-K plan, college savings plan, mortgage broker, tax preparation service)
  • Education (private schools, community colleges, colleges, universities, trade schools)
  • Other (Private Clubs, Golf/Country Clubs, Landlords, Debt Collectors)

Also, how do you know if you or a member of your family falls under the criteria of a "covered account?" Again, the short answer is any account that is primarily used for personal, family, or household purposes that involves multiple payments or transactions. In addition, any other account - including business checking accounts (in the event you are a business owner) -- where there is a risk of your account information being lost or stolen from your financial institution or creditor, which can result in ID Theft.

In summary, you should be responsible in asking your doctor, dentist, home and auto insurance agent (and other creditor relationships) if they are in compliance with the FTC Red Flags Rule and how your information is being protected.

To read my past newsletters and for additional information on how to protect yourself and your family from Identity Theft please visit the Merchants Identity Theft Educational Website at www.idtheftedu.com.


Scam Central

"Renters and Landlords are new ID Theft Targets"

A new scam targeting renters and landlords directs renters to a website called eRentalApplications that charges a fraudulent $14.95 fee to potential renters using rental property listings - of which some properties do not exist or are not even available - without the permission of landlords.

The website has taken legitimate online rental listings including contact information and asks the potential renter to pay the fraudulent fee through PayPal which has resulted in numerous complaints across the country.

In addition, potential renters are submitting sensitive information including name, address, email address, date of birth, names and birth dates of family members, current and previous addresses, current and previous employment information, credit history, and driver's license information.

Consumers need to know that this information IS NOT required to look at a rental property - and ONLY some of this information is required in completing a legitimate rental property application. Consumers with complaints should contact the FTC, Better Business Bureau, and their state Attorney General office.