Federal Trade Comissions "Red Flag Rules"

I belong to the Peach Area Habitat for Humanity, Inc., Board of Directors. In October of last year, we were advised that we needed to establish procedures and rules for our organization in the event that identity theft should occur involving one of our participants.

I have worked closely with Jean McDonald, our office manager in deciding what rules and procedures we needed. A template was provided by Habitat for Humanity International, Inc. and the majority of it did not apply to our small organization.

We only build one house a year and we have never had a problem with anyone who should not have participant information getting it.

If you come from a small town or a tight knit community like Fort Valley, then you know how the place works. For those of you who do not have experience with small town life, well everyone knows everyone and our office manager knows who is suppose to have what and who isn't!

With that being said, Jean and I decided to go with the full template sent to us for the "Red Flag Rules" just in case our organization grows and we need some of the components that do not apply right now.

I have included the template below in the event that anyone would like to look at it to get an idea of what the Federal Trade Commission (FTC) means by "Red Flag Rules".

I hope that this will help anyone looking for an explanation of what should and shouldn't be included in the rules. If you should have any questions, please email me at new2warnerrobins@yahoo.com.

~Holly Michele~


FACT Act Identity Theft Red Flag Rules
Peach Area Habitat for Humanity, Inc.




Purpose:

To implement a program that formulates guidelines to maintain an identity theft program in accordance with the Federal Trade Commission (FTC) and Fair and Accurate Credit Transactions Act (FACTA); and using these guidelines that are appropriate to provide a policy and procedures that meet the requirements of the final rules.

Definitions:

Identity Theft: A fraud that is committed or attempted using a person’s identifying information with authority.

Covered Accounts: Accounts that are used primarily for personal, family, household or business purposes that involved or are designed to permit multiple payments or transactions. Any account where there is a reasonably foreseeable risk to members or the safety and soundness of Peach Area Habitat for Humanity, Inc. Covered Accounts included, but is not limited to, mortgage loans.

Responsibility:

The Peach Area Habitat for Humanity, Inc. Board of Directors will approve the written program and approve any material changes; Agnes Stewart, President of The Peach Area Habitat for Humanity, Inc. Board of Directors, a senior management employee, will oversee the development, implementation and administration, ensuring that staff are trained and oversee service provider arrangements.

Administration methods for the program will include:

•Training staff members on specific responsibility for the program.
•Prepare and deliver to the board of directors an annual report regarding compliance with Red Flag rules. This report will address the issues and matters of:
o Effectiveness of the policies and procedures that address the risk of identity theft in connection with the opening of covered accounts or existing covered accounts, service provider arrangements.
o Significant incidents of identity theft and response to such incidents.
o Recommendations to improve and update program.

•Providing guidance for the board of directors to approve material changes to the program.


Requirements:

If service providers are used in connections with covered accounts, Peach Area Habitat for Humanity, Inc. will ensure that the activities of service providers are conducted pursuant to reasonable policies and procedures that comply with the rules.

Peach Area Habitat for Humanity, Inc. will implement procedures to:

•Identify relevant red flags for covered accounts
•Detect red flags
•Respond appropriately to red flags to prevent and mitigate identity theft in connection with the opening of certain accounts or certain existing accounts.
•Ensure policy and procedures are updated periodically to reflect changes in risks to members and Peach Area Habitat for Humanity, Inc.

Peach Area Habitat for Humanity, Inc. will identify relevant red flags and conduct a risk assessment that includes—financial, operations, compliance, reputation, and litigation; and determine whether it offers or maintains covered accounts taking into consideration:

•Types of covered accounts offered or maintained
•Methods provided to open accounts
•Methods provided to access accounts
•Previous experiences with identity theft
•Methods used to reflect changes in identity theft

Peach Habitat for Humanity, Inc. will address the detection of red flags: (1) by obtaining identifying information about and verifying the identity of the partner family members, (2) monitoring monthly mortgage payments, and (3) verifying the validity of change of address requests.

Possible sources used for detecting red flags include:

•Alerts, notifications or other warnings received from consumer reporting agencies or service providers, such as fraud detection services
•Presentation of suspicious or altered documents
•Presentation of suspicious, inconsistent or altered personal identifying information such as a suspicious address change
•Attempts to access an account by unauthorized users
•Unusual use of or other suspicious activity related to a covered account
•Notice from members, victims of identity theft, law enforcement authorities or other persons regarding possible identity theft in connection with covered accounts


Response Program: Peach Area Habitat for Humanity, Inc. will provide appropriate responses for preventing and mitigating identity theft. These responses will consider factors that may heighten the risk such as a data security breach; notification that a partner family member has provided account information to someone claiming to represent Peach Habitat for Humanity, Inc.; has provided information on a fraudulent website. These responses may include:

•Monitoring a covered account for evidence of identity theft
•Contacting the partner family
•Changing any passwords, security codes, or other security device that permit access to a covered account
•Reopening a covered account with a new account number
•Not opening a new covered account
•Closing an existing covered account
•Not attempting to collect on a covered account or not selling a covering account to a debt collector
•Notifying law enforcement
•Determining that no response is warranted under the particular circumstances

Updates: The policy and procedures will be updated periodically to reflect and respond to:

•Experiences with identity theft
•Changes in methods of identity theft
•Changes in methods to detect, prevent, and mitigate identity theft
•Changes in the business arrangements of Peach Area Habitat for Humanity, Inc. including mergers, acquisitions, alliances, joint ventures, and service provider arrangements