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FACTA & Red Flags Rules: What You Need to Know

24 April 2019

FACTA & Red Flags Rules: What You Need to Know

Consumers and businesses across the United States have many things to keep on top of; from finances to marketing trends and the latest and greatest. Many consumers however don’t realize the legal tools that are in place to help protect something that often is not given enough attention; identity. Likewise, many businesses don’t realize how critical and far-reaching such legislation goes.

In the United States, literally all businesses and consumers are impacted by legislation known as the Fair & Accurate Credit Transactions Act (FACTA). Signed into law in late 2003, FACTA was crafted with the intention of protecting consumer information and reducing the likelihood and instances of consumer fraud and identity theft.

FACTA – You Are Affected

Something that remains unknown to many Americans is that FACTA impacts literally all persons and businesses in the United States. Any person or organization that maintains or possesses consumer information for business purposes is obligated to abide by specific information handling, management and disposal guidelines within FACTA.

Such consumer information includes anything containing identifying components such as social security numbers, names, phone numbers, addresses and email addresses, among others. FACTA outlines that businesses handling such information are responsible for taking reasonable measures to ensure that this information does not fall into the wrong hands. Such measures include secure storage and handling, and disposal through such methods as burning, shredding or pulverizing.

Red Flags Rules

While FACTA applies to virtually all businesses in the United States, organizations within some sectors are bound to even more legislation intended to protect consumers from falling victim to identity theft and fraud. The red flags rules were created with the intention of fighting identity theft, but apply more specifically to financial institutions and creditors.

Issue alongside FACTA, the red flags rules stipulated that financial institutions and creditors had to develop and maintain a written plan to identify and act on warning signs of identity theft.

NRC Knows How to Help Your Organization

Whether you operate as a creditor or financial institution, or run any other type of business in the United States, NRC has the services to help your organization stay in line with FACTA and the red flags rules. Our secure information storage and shredding services are always updated to remain in check with information management legislation, and our team of experts are always up to date on security protocols.

If your business is in need of an information management partner that it can trust, call us today to learn more about how we can help protect you and your clients.