Identity theft has become more prevalent in the United States, as the growth of the internet and other technological advances have opened the doors to allow new opportunities for individuals to gain access to the identities of others.
In an effort to help curb this rising epidemic, the legislature and the Federal Trade Commission (FTC) have developed new Red Flag Regulations that will become effective November 1, 2008. These regulations, which were authorized by the Fair and Accurate Credit Transactions Act (FACTA), mainly address non-employment credit check scenarios; however, employers should be aware of their responsibilities under these new regulations.
Employers as well as all users of consumer reports must adhere to the Red Flag Regulations regarding address discrepancies. If an address discrepancy is detected, it doesn’t necessarily mean that identity theft has occurred; it means that the employer should investigate the warning and document an appropriate response.
The most important aspect for employers is to define and implement the Red Flag program itself. The FTC has mandated that a documented program is to be in place by the November 1, 2008 deadline. The employer is to develop and execute logical policies and measures that enable them to form a “reasonable certainty” that the consumer report relates to the applicant for whom the report was requested. Failure to comply with these regulations may result in civil liability.
Further information regarding the Red Flag Alerts can be accessed through the Federal Trade Commissions website at:
FTC Government Site
Direct Link to FACTA Red Flag Alerts page
