Red Flags Rule requires many businesses and organizations to address the pandemic issue of identity theft within their day-to-day operations. The federal rule requires applicable businesses to implement a written identity theft prevention program designed to detect the “red flags” of identity theft. Businesses must also incorporate preventative protocols to address identity theft and mitigate the damage inflicted on innocent third- parties. In short, a compliant program will spot suspicious patterns and prevent the costly consequences of identity theft. Many small and medium-size businesses are unaware of the Red Flags Rule and have little concept of the consequences for their operations. Nevertheless, the Red Flags Rule should be taken seriously as it is enforced by the Federal Trade Commission and other regulatory agencies.
It is inevitable; the investigation of certain chargebacks and fraudulent transactions will uncover circumstances that are applicable to the Red Flags Rule. Even though Red Flags is not the focus of Chargeback AdvocacySM, procedures within the program assist your company to satisfy certain of its compliance obligations under these regulations.
Red Flags Rule compliance is a dramatic example of the crossover between GIS chargeback specialists and their counterparts in the fraud division. This is a unique synergy that benefits your company.