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Willing to wager there’s no plausible connection between 90s dance group C + C Music Factory and the FTC’s just-announced request for public comment about the Red Flags Rule and the Card Issuers Rule, known collectively as the Identity Theft Rules? You might just lose that bet – and no, it has nothing to do with C + C’s ubiquitous hit, “Everybody Dance Now.”

But it has a lot to do with their other big hit, “Things that Make You Go Hmmm.”

The Fair and Accurate Credit Transactions Act (FACTA), which amended the Fair Credit Reporting Act, required the FTC and other federal agencies to establish guidelines for certain businesses on spotting patterns, practices, and activities that might be indications of identity theft. Under the Red Flags Rule, any “financial institution” or “creditor” subject to FTC enforcement authority must develop and maintain a written Identity Theft Prevention Program containing reasonable policies and procedures to detect, prevent and mitigate identity theft in connection with any “covered account.” (The Red Flags Rule defines those terms.) What should raise a red flag is fact-dependent, of course, but it could be something like a driver’s license that appears to be altered or a credit application when there’s a fraud alert on that person’s credit report.

Also a product of FACTA, the Card Issuers Rule requires debit or credit card issuers to put reasonable procedures in place to assess the validity of a change of address request when it’s followed quickly by a request for additional cards for the same account. The Rule was designed to address a pet tactic of fraudsters: changing the billing address for a consumer’s credit card and then asking the issuer to send an extra copy of the card to the new address.

Both rules ask businesses to think through the suspicious patterns they observe that suggest fraud – in other words, to paraphrase C + C Music Factory, conduct that should make them “go hmmm.” In that way, the rules help mitigate the costly consequences of identity theft both for businesses and for consumers.

It’s the FTC’s practice to take a periodic look at existing rules and ask for feedback about how they’re working in the real world. What are the costs, benefits, and economic impact? Have there been changes in the marketplace that suggest a rethink might be warranted? The FTC has just announced that next under the regulatory review microscope are the Red Flags Rule and the Card Issuers Rule, so we’re asking for your input. Read the Request for Public Comment for a list of general and specific questions we’re asking. File your comments by February 11, 2019.
 

Comments

What about personal checks? Sending checks as payments for goods, services, or basic bill paying allow your name, address, phone # (if on check) to be "seen" and/or copied by persons processing your check. They also get to see, and may6be copy, your "signature" as seen on the check. This may or may not be enough for persons to use that information/data to commit fraud or other undesirable financial actions against you. Will there be any thoughts and discussions about this and maybe seek public guidance?

Leslie, again, you crack me up. Thanks for the great reporting and information.

A good friend of mine is constantly having to deal with identity theft every time she refinances. She was in the banking business as I am and feels strongly it is an inside job (the place where she is obtaining the financing) - since the issue occurs during the time she takes the hold off her credit report for the short time to obtain the refinance. She has taken every measure available to protect herself and her credit but it just seems to be a constant problem and has become the part time job of "fixing" that no one wants. I don't have that issue since my ex-husband ruined my credit.........silver lining???

So appreciate your updates. Thank you for all your efforts!!

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