Red Flag Rules Do Apply to You–Yes, You

While many firms think the federal Purple Flag Rule applies just financial institutions, if you invoice customers for the goods or services, this applies to you, also.

Regulations designed to decrease identity theft went in effect in June of 2010. Are you making sure that you comply with them?

The federal government government’s so-called “Red Flag Rule” requires all businesses that are potential identity-theft targets develop plans to spot red flags and stop theft. Red flags contain suspicious image IDs, unverifiable addresses and Social Reliability numbers, and questionable bank account activity, to name simply a few.

While many corporations think the Red Flag Rule only is applicable to monetary institutions, it actually relates to all creditors–with creditors getting defined as “businesses or perhaps organizations that regularly present services and goods first of all and allow customers to pay later, ” relating to a Frequently Asked Questions guide made simply by the Federal Trade Percentage, which will enforce the Red Flag Rule.

In other words, if you invoice customers for the goods or services, most likely a creditor–and the Red Flag Rule applies to you.

How may you comply? You are going to need to have a written policy that especially addresses how you is going to prevent and handle identification theft. Other tips incorporate data encryption, twelve-monthly improvements of your written insurance plan, and staff training.

Although this may seem to be burdensome, you don’t want to disregard the legislation. Fees are $3, 500 every violation–and the threat of a lawsuit from clients whose identity continues to be taken.

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Do You Comply with the FTC’s Red Flag Rule?