RED FLAG RULES EFFECT AGAINST ID THEFT

Corporate America takes extra steps to detect and prevent fraud related to identity theft. It is also expected that American banks will develop better procedures to notify victims. It is the issue of their reputation and business quality.

The new regulations against ID theft are known as the "red flag rules". They were authorized by the Fair and Accurate Credit Transactions (FACT) Act and were started a year ago. A new protection was enacted not only by the banking agencies - the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve Board and the Federal Deposit Insurance Corp. - but also the Federal Trade Commission.

Red flag rules are aiming to respond to a growing perception among Americans that business and even government entities are keeping too much personal information and not securing it. And such situation causes series of computer breaking and mishaps that have exposed millions of consumers to fraud. And as a result consumers fear to lose confidence in business and may stop using the Internet, stop shopping online and other technology that American business has spent billions of dollars investing in.

Under the "Red flag rules", banks and other companies must look at how they open accounts for products or services, and how they verify a new costumer's identity.

by EcommerceJournal