What Role Does Your Association Have in Preventing Identity Theft?
You may soon have an increased role in preventing identify theft, thanks to a new regulation that will soon be enforced by the Federal Trade Commission.
The Red Flags Rule requires many businesses and organizations to implement a written Identity Theft Prevention Program designed to detect the warning signs -- or "red flags" -- of identity theft.
Although community associations are not specifically stated, FTC regulations do target entities engaged in providing installment plans where the payment for goods and services are delayed (which includes some associations). Other factors that could require an association to comply with the Red Flags Rule include size, number of employees with access to financial records, and the frequency of financial transactions with residents.
Because community associations will likely be considered low risk for identify theft, a minimal Red Flag policy would be required. A written program would also better equip you to spot suspicious patterns and prevent them from escalating into a costly episode of identity theft.
For additional information on whether the Red Flags Rule applies to your community association and how to put in place your written Identity Theft Prevention Program, check out Fighting Fraud with the Red Flags Rule: A How-To Guide for Business.
Fortunately, you still have time to implement your program. At the request of members of Congress, the Federal Trade Commission is delaying enforcement of the Red Flags Rule until June 1, 2010.