The deadline for your compliance with the Red Flags Rules is coming up fast with enforcement slated for November 1st, 2009.

It is estimated that over 11 million businesses must have a written Identity Theft Prevention Program in place to help stop the effect of Identity Theft.  There are a few common misconceptions out there and I hope to address some of this here.

The first misconception is that this is for businesses who have an Identity Theft problem.  This is not correct.  When you read through the requirements of the program, this regulation is about detecting the warning signs that you are dealing with an Identity Thief as a client or customer and how to deal with this situation.

Why is this important to you as a business?  First off, the fines from the FTC begin at $2500 per instance for non compliance.  Second, recent legislation at the Federal level and at many state levels make is possible for civil litigation.  The victims of Identity theft are now able to sue businesses who sell or provide services to the fraudsters who claim to be the victim for negligence in that the business has a duty to insure that their clients and customers are who they say they are. 

While there seems to be a huge stink over the red flags rule and businesses not wanting to comply because it is too difficult, I cannot understand why a business would not want to comply just for a sanity check.  According to the folks at ID Sure – the average cost to the business who assists an ID Fraudster without Identity Verification is over $90,000.   Also according to IDSure, Red Flags Rule Compliance take just a few minutes to complete per customer.

With the deadline looming, we will be posting quite a bit of info in the coming weeks.  In the meantime, if you have questions about the Red Flags Rule and how to comply, just check out http://www.idsure.org