FTC Issues Red Flags Rule FAQs
The Federal Trade Commission and the federal banking regulatory agencies have released answers to frequently asked questions to assist financial institutions, creditors, users of consumer reports and card issuers to comply with the Red Flags Rule and the Address Discrepancy Rule.
The FAQs are grouped by category and provide guidance to regulated entities in several areas, including:
- the application and scope of the Red Flags Rule,
- clarification of the definitions of “covered account,” “identity theft” and “service provider,”
- guidance on the establishment of a compliant identity theft prevention program,
- examples of Red Flags,
- the types of notices of address discrepancies that trigger the Red Flags Rule, and
- guidance related to the requirement to furnish a consumer’s address to a consumer reporting agency.
These FAQs grew out of common concerns raised with regulators about the Red Flags Rule. The FTC has explained that the FAQs will be updated periodically to address additional questions regarding the regulations and compliance issues. The FTC also stated that it will issue a separate set of FAQs in the near future to address other questions raised by FTC regulated entities.
Troutman Sanders LLP offers a full array of services to help businesses with compliance efforts related to the Red Flags Rule.