Red Flag Rule

Effective January 1, 2008, the Federal Trade Commission (FTC) implemented the Red Flag Rule as part of the FACT Act. By June 1, 2010, dealerships have mandatory compliance requirements of the Red Flag Rule.  The purpose of the Red Flag Rule is to define a process for protecting a consumer from identity theft.  The FTC has identified 26 red flag indicators that dealerships may want to consider including in their identity theft prevention program.   

The indicators are merely examples, and are not considered a comprehensive list.  In addition, not all of the red flags indicators are applicable to your business.  

A comprehensive dealer solution includes an on-site, manual solution.  The manual elements a dealer must have to fully comply with the Red Flags Rule include:

• The development and implementation of policies and procedures
• Employee training
• Periodic audits
• The delivery of an annual, written report on the program’s sufficiency to the owner(s) of the business.

gvo3 & Associates can offer dealerships assistance with the on-site manual solutions requirements outlined as part of the Red Flag Rule.  Our program includes:

• A Risk Assessment
• Implementation of an Information Security Program
• Initial and ongoing training for Compliance Officers and staff
• Follow-up audits
• A final report

Please take a moment to read recent and archive articles written by Gil Van Over and Joe Bartolone regarding the Red Flag Rule.

• Three Months and Counting, Dealer Magazine: Compliance Corner, May 12, 2009.

• Three Days and Counting, Dealer Magazine: Compliance Corner, April 28, 2009.

• Ten Days and Counting, Dealer Magazine: Compliance Corner, April 21, 2009.

• Tick Tock...Red Flags Looming, Dealer Magazine: Compliance Corner, February 17, 2009.

• Implement Both Rules, Dealer Magazine: Compliance Corner, September 30, 2008.

• Red Flags Rule - Do it Yourself or Outsource, Dealer Magazine, August 2008.

• Taking on the Red Flag Rule, F&I Management & Technology, February 2008.
  
  
• The Electronic Red Flags, Dealer Magazine: Compliance Corner, January 22, 2008.

• The Manual Red Flags, Dealer Magazine: Compliance Corner, January 8, 2008.

• The 31 Red Flags, Dealer Magazine: Compliance Corner, December 18, 2007.

• Best Practices - Proposed Red Flag Rule, Dealer Magazine: Compliance Corner, October 2, 2007.

• Red Flag Rule Disclosures, Dealer Magazine, September 2006.
  
  
• The Red Flags are Coming, Dealer Magazine: Compliance Corner, August 1, 2006.