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Tuesday, January 1, 2008

Agencies Issue Final Rules on Identity Theft Red Flags

The federal financial institution regulatory agencies and the Federal Trade Commission have issued the final rules on identity theft “red flags.” The final rules implement sections 114 and 315 of the Fair and Accurate Credit Transactions Act of 2003.

The rules require financial institutions and creditors holding consumer accounts that might be at risk of identity theft to develop an identity theft prevention program for new and existing accounts. The program must enable a financial institution or creditor to:

  • identify specific forms of activity that are “red flags” signaling possible identity theft and incorporate those red flags into the program;
  • detect red flags that have been incorporated into the program;
  • respond appropriately to red flags in order to prevent identity theft; and
  • update the program periodically to reflect changes in risks from identity theft.

Credit and debit card issuers also must develop ways to assess the validity of a request for a change of address that is followed closely by a request for an additional or replacement card.

The rules also require those who use consumer reports to develop procedures on what to do when they receive a notice of address discrepancy from a consumer reporting agency.

The final rules were issued by the Federal Reserve System, the Federal Deposit Insurance Corp., the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. The final rules are effective Jan. 1, 2008. Covered financial institutions and creditors must comply by Nov. 1, 2008.

Federal Reserve Posts New Web Site for Consumers

A new web site from the Federal Reserve is designed to help consumers find information on a variety of financial topics.

The web site includes information on home mortgages, credit reports, starting a small business, electronic banking, checking accounts and more. A feature called “Can a Bank Really…” explains what rights banks have, while another feature explains consumers’ rights and how to file a complaint about a bank.

To view the web site, visit