Series 24: 3.1.5.3. Identity Theft Red Flags

3.1.5.3. Identity Theft Red Flags

The Fair and Accurate Credit Transactions Act of 2003 (FACT Act) directs federal agencies to create rules regarding ways to detect, prevent, and mitigate identity theft, and to identify which institutions must have an identity theft policy. The programs should detect the warning signs—or red flags—of identity theft in their day-to-day operations. Identity theft is the fraudulent acquisition and use of a person’s private identifying information, usually for financial gain. An identity theft program can help businesses spot suspicious patterns and prevent the costly consequences of identity theft.

The Federal Trade Commission (FTC) responded by creating the Identity Theft Rule, which requires financial institutions, including broker-dealers, and investment companies to establish and maintain identity theft programs. This rule also tells businesses how to develop, implement, and administer s