Ladies and Gents,

October 31, 2009 is the deadline for your business to have completed it's Federally mandated Red Flags Rule Plan. Starting November 1, 2009, you could receive up to a $2,500 fine for non-compliance.

Yes, I was shocked too, when I found this out. This little known rule has actually been in place for a while but the government is now stepping up efforts for enforcement to urge compliance in the wake of how widespread Identity Theft is.

Per the rule, you are required to "...develop a written program that identifies and detects the relevant warning signs – or “red flags” – of identity theft. These may include, for example, unusual account activity, fraud alerts on a consumer report, or attempted use of suspicious account application documents. The program must also describe appropriate responses that would prevent and mitigate the crime and detail a plan to update the program. The program must be managed by the Board of Directors or senior employees of the financial institution or creditor, include appropriate staff training, and provide for oversight of any service providers."*

The Red Flags Rule applies to "Financial Institutions" and "Creditors" with "Coverd Accounts." That's easy, you say, as you do not see yourself as a bank or creditor.  The problem is that most of you, like me, ARE actually creditors.  Basically if you do any type of transactions where the customer does not pay "that moment" when the product or service is being delivered, you are in effect extending credit and are a creditor under the law, and subject to fines for not having a plan in place.

An example from my business is that sometimes I charge customers with "half down - half upon completion". When their work is done, I send them an invoice.  I don't do this all the time but I do it SOMETIMES and that makes me liable. Because the customer has not totally pre-paid or paid at the moment the service is done or product delivered, you become a creditor.

Yes, I know, it's one more thing to do! Being a good business person, and looking out for your customers and clients, you should secure your data and do everything you can to prevent identity theft.  When you shop or buy, you expect that from the retailer, right?

As part of my business, I can help you create a plan quickly and cheaply. Most plans are able to be delivered in 72 hours and I will discount 20% for Little Pink Book members.

You can see more information on the site I have created for this www.RedFlagsRulePlan.com

Whether you create your own or get help in making one - please do it! It's not worth the fine and the exposure (liability) if you are caught without it.

Sincerely,

Christine Burke, MAOM

www.StrategicIntelligenceServices.com