WVML Press

09/19/2008

New federal regulations, known as “red flag rules”, require financial institutions and creditors to develop and implement written identity-theft-prevention programs. Because of the definition of “creditor”, many municipalities may be affected by these regulations.

A municipality that provides a service to customers and collects payment later must comply with the red flag rules. The red flag rules are part of the federal Fair and Accurate Credit Transactions (FACT) Act of 2003. Under these regulations, financial institutions and creditors with covered accounts must have identity-theft-prevention programs in place by November 1, 2008 to identify, detect and respond to patterns, practices, or specific activities that could indicate identity theft.

Read more: Federal Identity Theft Prevention Requirements