The Federal Trade Commission’s (FTC) Red Flags Rule deadline
is rapidly closing in, and after November 1, businesses subject to the rule may
be heavily fined if compliance has not been met. Even though this rule intends
to protect the majority of consumers, some organizations are taking advantage
of the requirement to sell products that may or may not actually help
businesses reach total compliance.
Examples range from businesses such as IDSure, which advertises an identity
verification service as a complete Red Flags compliance policy, to download
sites offering Red Flags compliance programs in simple web browser toolbars. Seasoned compliance officers may understand that
identity verification is simply one part of a larger compliance strategy, but
for business owners who may still be confused with implementing the proper
procedures to avoid the costs of noncompliance, products labeled as “complete”
compliance solutions can be potentially misleading.
While it’s true that id
verification and id authentication services are a valuable part of any Red Flags Rule compliance
program, the FTC has released extensive how-to documentation detailing the importance of detecting red flags unique to
your business and keeping your compliance program updated accordingly. It is
highly unlikely that any product provides a complete package for compliance
that is suitable for every business, and businesses that try to opt for
convenience over detail might find themselves paying fees after November 1.
If you and your business need to become Red Flags Rule
compliant, please visit the FTC’s
how-to compliance guide. Take an active role in building a unique
compliance program. Your decisions affect both the health of your business and
the security of your customers. You can use tools such as comprehensive
identity verification and authentication services to create a thorough fraud
prevention program, but don’t rely on a company, or a toolbar, to provide you
with total compliance.