Red Flag Rule

Effective January 1, 2008, the Federal Trade Commission (FTC) implemented the Red Flag Rule as part of the FACT Act.
By December 31, 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: red-flag-rules2

  • 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.