Red Flags Rule Requires Businesses to Protect Customers’ Credit
New Federal Trade Commission rules are about to kick in, known as the “Red Flags Rule.” Individuals are likely to appreciate the new rules, as they involve a requirement for businesses to do be more proactive in verifying the identity of their customers, which in turns helps prevent identity thieves from coming out the winners. Businesses will need to be alert as to identification that match the person presenting it, anything that appears to be forged and will need to heed fraud alerts on credit reports.
Miami lawyer, Luis Salazar, says, “It focuses on any company that extends credit – such as where they bill you now and you pay in 30 days. If there’s a red flag, they have to investigate.” He also points out that not even the smallest businesses are excluded, if they would qualify as a creditor. The rules were enacted in 2007, but not given a deadline until now to allow business owners time to come up with written plans addressing identity theft, which has been the top complaint with consumers for over nine years.
The new rule is supposed to help lessen cases of identity theft, by removing some of the burden from consumers and shifting it onto businesses. This doesn’t mean consumers are off the hook though, and there are some basic things each person can do to limit their exposure to incidences of identity theft.
Examples of ways to limit such fraud includes not carrying your social security card with you and not giving your number out unless absolutely necessary and appropriate. Same goes for most personal information, which should be withheld, whether dealing with an internet site or telephone call, don’t give information out unless you are sure the other side is authentic and needs the information. Be wary of scams.
Another protective measure is to shred any documents that contain information like banking information, credit card numbers or your social security number, rather than simply recycling or throwing in the garbage. Also check your credit report regularly to be sure you catch unusual activity as quickly as possible.
