After some erroneous start, the FTC finally started compliance with the fair and accurate margin trading law, the red flag regulation, and to legitimately guard the identity information theft activity to the shoulders of both large enterprises and SMEs Inherent in. However, as nationwide attorneys are keenly awaiting this dangerous and potentially impossible regulation, if you make an appeal of identity theft, the FTC may be most concerned about your concerns I do not. Your problem? Confirm the identity of the customer. If you do not receive the necessary procedures to do so, it may cost all the costs you have worked so far. Your red flag rule policy and program. First of all, your operation must develop and implement a red flag policy that must include four necessary key elements in addition to other regulations and problems that must be dealt with. In order to show the importance of the location of the FTC to the regulations, the steering committee needs to approve your red flag rule policy and program. For operations without a board of directors, the senior executive committee must approve the first program and monitor it every year.
But there is nothing to be misunderstood! Just by downloading the "template" from the Internet, you may lose connection with the Federal Reserve System, but lawsuits with defense lawyers of identity theft are not enough. Since the lawyer already sees this regulation as "cash cow" and uses the customer's identity, when the victim lawyer points to the fingertip of the customer's company, the victim lawyer requires written red flag regulation, necessary staff training Documentation. If you do not have a policy or are inadequately written, plaintiffs assert that you are in violation of the obligation to protect consumer identity information, that is "not intentional". It is bad to hear it. Required staff compliance training. The rules also mandate your work so that your staff can provide you with regular Red Flag Rules compliance training and prove it! If there is a "training" idea besides allowing the staff to read your policy, the smell of diesel fuel smell is to get over you from the bus. Let's be honest. The federal government demands that you be impossible to prevent identity theft. Your only defense is that it is not when it happens, but when it happens, it is making effective efforts to prevent it from occurring.
In fact, virtually all compliance lawsuits, federal or civil lawsuits, "did this project have done all of the reasons to prevent this illegal activity? If so, where is the evidence worthy of his pin stripes Lawyers tell you that there are two keys to defending compliance lawsuits: regular training and documentation, your job is to train newly hired employees as part of the orientation, and serious fines , Penalties, and the possibility of a jury award, at least once a year it is necessary to fill in the document and provide training to all officials Identity information verification process as a promise of identity confirmation of consumer's driving license The days when I just made a copy of the proof is over.There are some red flag rules, There are 26 potential red flag risks that the designated body must take into consideration when conducting a trading that is theoretically 26. In theory, if any of these flags are present in the identity presented by the individual, the business is a third party You need to find the identity of that person by searching outside the source The problem is that virtually all of these potential red flags are open to interpretation, in other words, guess!
What your staff looks like red flags, other staff may not be, under your benevolence efforts to become compliant, it may cost you. If you are worried alone, there is the possibility of prejudice or discrimination claims if you do not do the same identity verification process for all customers opening a new cover account. I can not imagine accusing your business as discrimination because you scanned identity for a national heritage. It is not most white people. At the discovery phase of a lawsuit like attacking a child on Christmas morning, I will portray that an identity theft attorney will rip all of your files. For what purpose do you ask? How about you made an identity verification process with 80% of the minimal applicants? But how about with 20% of whites? The smart thing is to disassemble from trying to interpret the red flag in the customer's identity using a compliant identity scan. For this matter it may not be wise to rely on what is included in your client's credit report
This rule requires identity verification from an external data source or confirmation of the state of the rule. "... It is not the information contained in the consumer credit report or the information contained in the wallet in general.It authenticates your customer's identity through a challenge question.If for the moment is not experiencing voluntary convulsions This may put you at the end There is a difference in verifying the identification information presented by the individual and authenticating the identity of the individual who actually presents the information.For example, May be an identity thief that actually provides the stolen information.This remedy is to issue a "challenge question" to certify that the individual is actually the person representing himself. The question must be put in such a framework in a timely manner so that only individuals with that identity can answer. Also, according to the rules, these questions can not be formed from consumer credit report or information contained in the wallet in general, but SSN validation service, SSN death master file, state, DOB, all related Federal, Federal, and global databases to verify address, phone number assignment, etc.
This all takes one day with only one client. Sometimes we also consider a corresponding identity verification service that also provides challenge questions. In any case, when issuing a challenge question, it is necessary to make a challenge question so as to keep away from prejudice and discrimination claims. Your lender's relationship. The Red Flags Rule will charge the lender with the responsibility to guarantee compliance with the Red Flags Rules as collateral, under the rules you can do so by contract. This gives the lender the right to examine and audit the procedure at any time. Also, brokers nationwide have already been denied service until they are deemed to be compliant with the lender. Compliance Violation and Fines The Federal Trade Commission clearly states that compliance with the Red Flags Rules is not merely a suggestion, but "rolling enforcement" is adopted so that this regulation is not neglected. "Rolling enforcement" is considered to mean investigation and audit made without notice, but if you find that you are not in compliance,
- Federal fines for compliance violations are up to $ 3,5000 per occurrence. In other words, if there were 1,000 violating transactions in a year, the fine would be $ 3.5 million.
- Your state attorney general may be able to file a class action lawsuit. "Unfair and deceptive behavior and practice" In general it is usually the actual punitive damages.
- You may be responsible for the actual loss of the victim (Average US $ 92,893) You can not create a substantially written red flag rule policy and you can not document the evidence of necessary staff training.
In summary. What the Fair Trade Commission is hard seeking in a "rolling enforcement" round against non-law compliant companies is not a secret, but more importantly, private violators will not violate your intentions I am eagerly waiting for you. Diffusion of high-tech software that makes companies more efficient can also be used for identity theft crime elements to counterfeit driver's licenses, tax payment records, public benefit bills, credit cards, etc. for the purpose of providing you a wrong identity With information. It is impossible to prevent identity theft. You know it, but I know it and the federal government knows it. Your only defense is to make the best efforts to comply. That is with documentation. Do not make sure this regulation is impotence so that it is not wrong.
The consumer drum beat on identity theft grows every day and will surely follow along with the fear of institutions fear that many regulations are not compliant. Make sure one of those horror stories is not about you. The best opportunity for you to get it right is from the beginning. Note: Because the content of this article does not provide legal advice, it is intended as the first resource guide only. In addition, content is not intended to answer concrete questions in specific cases or circumstances, or to indicate conformity of behavior. As for the guidance on this compliance issue, the author recommends that the reader consult with legal counsel.
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