Identity Theft Legislation

Identity theft occurs when someone uses an individual's personally identifiable information, such as a social security number (SSN) or credit card number, to take possession of that person's identity without permission and control existing accounts, open new accounts, or commit fraud.

In response to growing identity theft trends, industry regulators developed amendments to existing legislation to enforce requirements for financial institutions and certain creditors.

The updated federal legislation is commonly referred to as the "Red Flags Rule" and requires financial institutions and certain creditors to implement a written program to detect, prevent, and mitigate identity theft. Compliance with the Red Flags Rule for financial institutions became effective November 1st, 2008, and for creditors regulated by the FTC enforcement is required starting May 1st, 2009.