If you run a business, you’re probably well aware of the many legal expectations you must meet in your daily operations – of course these vary based on several factors such as industry type and business size, but in any case, all business owners must meet specific standards. Standards that often relate to ethical behavior and customer care. From health and safety standards to operations standards, there is endless legislation in place with the intention of protecting customers and patients, ensuring they receive honest and quality services/products.
Unfortunately identity theft cases continue to rise, and without effective measures in place to prevent such occurrences, it’s easy to be targeted and face liability issues. Preventing identity theft begins with following important privacy legislation and guidelines. The Red Flags Rule, is just one of the many regulations in place to help combat identity theft, and one you should be made well-aware of.
If you’re new to the finance world, manage a bank, or are a collection agency, you may already be familiar with the Red Flags Rule. On the other hand, this may be an entirely new term to you. Broadly speaking, this rule addresses the many safeguards and processes that need to be in place to help maintain customer privacy, and prevent identity theft.
What is the Red Flags Rule All About?
The Red Flags Rule stems from critical sections of FACTA, and was introduced in an effort to help consumers protect their credit and other personal information. It mandates that certain businesses create, implement and maintain a set of procedures and safeguards that will help identify and prevent risks of identity theft.
The Red Flags Rule applies to the financial sector specifically, including:
- Financial institutions (banks, savings & loan associations, credit unions etc.)
- Creditors (any entity that regularly extends, continues or renews credit, or is involved in such activities)
Like most legislation, failing to comply with components set out under the Red Flags Rule, could lead to substantial consequences such as costly fines.
What are the Expectations?
Any business that is categorized under the jurisdiction of the Red Flags Rule, must establish and practice a specific program that can clearly detect signs of identity theft, and make the appropriate changes to reduce risk.
This practice should include the following key objectives:
- Identifying risks
- Detecting risks
- Limiting risks and damage
- Updating policies where necessary
What are the Categories of Red Flags?
The FTC outlines 5 main categories in the regulations to look out for:
- Warnings, alerts, notifications from a consumer reporting agency
- Suspicious documents
- Suspicious activity pertaining to a covered account
- Unusual inconsistency with a last name or address, or other suspicious personally identifying details
- Notifications from customers, law enforcement, or businesses regarding potential identity theft tied to specific accounts
How Can I Protect Myself from the Risks of Identity Theft?
Beyond the specifics under the Red Flags Rule, there are simple measures you can take to prevent your information from falling into the wrong hands. Whether you store your information electronically, physically, or like most businesses both ways, consider taking these steps to help combat identity theft:
- Use anti-virus and anti-malware software to stop malicious malware from attacking your device(s).
- Implement a policy that encourages secure document management, and organization, such as a Clean Desk Policy.
- Turn to professional document shredding services for the safe destruction of your sensitive documents and hard drives.
Professional Document Shredding Services
ATI SecureDocs is your trusted source for safe, secure and efficient destruction. Our team offers tailored solutions based on your unique needs, including one-time purge shredding, on-going document shredding, as well as hard drive destruction. Customers benefit from a premium off-site facility that provides the maximum amount of security and renders your information entirely irrecoverable.
Most importantly, our approach to document shredding ensures total compliance with privacy legislation, such as what’s mandated in the Red Flags Rule.
Talk to us today to find out more about how our services can protect you from identity theft!