Failure to comply may increase firms’ exposure to negligence claims….

In a press release issued by Beazley Insurance – http://tinyurl.com/ns6v67 –
They talk about how the Red Flags Rule could have an effect on claims to firms.

This is an interesting twist on Red Flags Rule Compliance in that it begins to bring to light other issues.  While most companies and professional firms are beginning to finally understand that the Red Flags Rule Program is about fighting fraud that results FROM an incident of ID Theft, the Lawyers are most concerned these days with threats of suing the FTC for making them comply.   The issue should be that businesses should be responsible for identifying or noticing the red flags that show up with certain clients or customers that could be an indicator of an identity theft incident.  If you see red flags, you should take measures to address them.  Pretty simple.  Now imagine the issues that can pop up if you do not?

The FTC realizes that it is impossible to stop Identity Theft – but this program will shutdown the outlets the thieves have to practice their trade.  If it is harder to profit from Identity theft, then it is likely that ID Theft will be reduced.

Imagine that as an accountant that a client comes in with tax info, W2, etc and has you file their tax return.  You take a quick look at their drivers license and then you file their return and get them a $2000 refund.  Later the real person comes in with similar paperwork and a letter about an audit from the IRS about the tax return that you prepared.  Did you follow the Red Flags Rule Program?  Did you perform due diligence?  Who is going to pay for fixing the damage with the victim and the IRS.  What if the victim files civil charges for the damages?  In a recent event – http://tinyurl.com/kvlp7t
citizens in Michigan are now able to compensation for time and effort to clean up the effects of Identity Theft.  What is the cost of that to your business or firm?

The issue I want to summarize here is, with the sue happy attorneys our country has bread, will your insurance company back you or drop you if you get sued for damages resulting in an ID Fraud incident.  Beazley and the other insurance companies are not saying their customers MUST comply, but the fact that the liability insurance companies are sending letters and notifications is an indicator that it could affect your policy if you don’t comply.

Compliance with the Red Flags Rule Program is easy.  http://IDSure.org offers a free template wizard to create your program with the signup of their ID Verification Service.  The program take about 10-15 minutes to setup and the Services run from $69 a month and up depending on how many customers you need to check.  In support of my  Easy Red Flags Blog, the folks at IDSure are giving my followers a discount of 10% on their services for as long as you use them and if you signup by the August 1st Deadline, you get double the ID Checks the first month to help clean up your existing files.  Just use coupon code ERF2307 and the discount will apply.  Look at it this way – the ABA says it takes 120 hours to create a Red Flags Rule Program – my readers are doing it in about 15 minutes.  Looks like I have a topic for my next blog