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Red Flags Rule & Identity Theft


New Identity Theft Is In Effect!

 

The Federal Trade Commission's Identity Theft Rule, also called the Red Flags Rule, went into effect as of December 31, 2010.

 
SAF Red Flags Rule Resources

  1. Red Flags Rule Summary
  2. Sample Policy
  3. Frequently Asked Questions

   

“The cost in time,
consultant and attorney
fees for an independent
florist to develop a policy
like the one SAF provides
could easily exceed $1,500 by the time the project is completed."

<— Ken Young
Phoenix Flower Shops
Phoenix.

If your business or non-profit organization regularly accepts deferred payment or provides goods and services and bills customers later you must design, put in writing and implement a formal identity-theft prevention program.

If you don't, you could face fines of up to $2,500 per ID-theft incident, not to mention the usual threats of lawsuits and reputational damage that sometimes result from a data breach.

The new rules don't apply to all businesses, but they will pertain to many that collect and store information about others — names, addresses, Social Security numbers, bank-account and credit-card numbers and so on — either because the firms defer payments themselves or bill customers later for goods or services.

In a statement, the FTC said that by identifying red flags in advance, businesses will be better equipped to spot suspicious patterns when they arise and take steps to prevent a red flag from becoming a costly case of identify theft.

Every program must include four procedures:

  1. How to identify red flags
  2. How to detect red flags that have been identified
  3. How to determine appropriate action to take when a red flag has been detected
  4. How to re-evaluate the program to reflect ever-changing threats.

SAF has drafted a template of a sample policy that can be used as a guideline for business owners to create their own plans and avoid the cost of having a lawyer draft them. The document also provides examples of potential red flags and specific procedures for detecting red flags and responding to them.


 

 

Keywords: red flag, security, retail floral industry