FACTA Compliance Deadline is May 1st Are You Prepared?

April 07, 2009

The FACT Act, or more commonly known as Red-Flag Rules, become effective May 1, 2009. Covered entities must have developed and implemented a written program to detect, prevent and mitigate identity theft of customers and clients. Specifically, the Act requires:

Create a written, company-specific identity theft prevention program.

Implement change of address safeguards.

Verify identity upon notice of address discrepancy from a consumer reporting agency.

Train all employees who handle or process confidential information relating to financing and customer accounts.

Covered entities are those who are considered "financial institutions" or "creditors" with covered accounts. Financial institutions include state or national banks, a state or federal savings and loan association, a mutual savings bank, a federal credit union or any other entity that holds a "transaction account" belonging to a consumer.

A "creditor" is any entity that regularly extends, removes and continues credit; any entity that regularly arranges for the extension, removal or continuation of credit; or any assignee of an original creditor. Examples of creditors include, but are not limited to, finance companies, automobile dealers, brokers, utility companies, country clubs, healthcare to include long-term care institutions, telecommunications and any other entity that is designed to permit multiple payments or transactions on behalf of an individual, family or household.

SESCO has prepared a compliance manual ($50) as well as a training program designed for management and employees. SESCO can also assist with the development of a company-specific policy and procedures to ensure compliance.

If you are unsure if you must comply with FACTA and/or need assistance to ensure compliance, please feel free to contact:

Phil Richards
Aubrey Lee
SESCO Management Consultants
423-764-4127
423-764-5869 Fax
phil@sescomgt.com
aubrey@sescomgt.com
www.sescomgt.com