The Red Flags Rule, enforced by the Federal Trade Commission (FTC) and several other agencies, is a rule meant to protect consumers and businesses from the growing risk of identity theft.
Dealerships are required to be compliant according to these rules, AutoRaptor reported.
"An estimated nine million Americans have their identities stolen each year," the Federal Trade Commission said. "Identity thieves may drain accounts, damage credit and even put medical treatment at risk. The cost to business — left with unpaid bills racked up by scam artists — can be staggering, too."
The four steps to ensure compliance with the Red Flag Rules, as suggested by the FTC, include identifying the dealership's possible red flags significant to each specific location, detecting red flags through identity verification methods and other information received pertaining to a potential customer, having a clear and concise way as to handle potential threats and authorities needing contacting.
The fourth step states it is important for dealerships to continue to keep one's Red Flag Rules compliance program up to date as the potential for identity theft is ever present.
AutoRaptor also recommends writing the program and process down for all employees to know and have easy access to, having one person designated in assessing and evaluating the plan annually, hiring a person specifically for handling the compliance of this regulation and making sure a Red Flag Rules plan is updated annually as changes are made to ones' dealership or to the regulations.
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