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Financial institutions and
creditors are required by the Fair and Accurate Credit
Transactions (FACT) Act of 2003 and related Federal Trade
Commission Regulations to implement a program to detect,
prevent, and mitigate instances of identity theft. The
Regulations are commonly referred to as the “Reg Flags
Rule”. All creditors are required by FACT to institute the
programs that provide for the identification, detection, and
response to patterns, practices, or specific activities –
known as “red flags” – that could indicate identity theft by
May 1, 2009.
The Red Flags Rules apply to
“creditors” with “covered accounts.” A
creditor is any entity that regularly extends,
renews, or continues credit; any entity that regularly
arranges for the extension, renewal, or continuation of
credit; or any assignee of an original creditor who is
involved in the decision to extend, renew, or continue
credit. Government entities that defer payment for goods or
services are considered creditors that must implement an
identity theft prevention program. A
covered account is an account used mostly for
personal, family, or household purposes, and that involves
multiple payments or transactions.
Covered accounts
include utility accounts, deposit accounts, and extensions
of credit, such as accounts for the purchase of property or
services by deferred payment. All hangar rental accounts,
tie down rental accounts, aircraft fuel accounts, aircraft
services accounts, aircraft supply accounts, recycling
accounts, tipping fee accounts, and sports field lighting
accounts that are held by customers of the Department of
Environmental Services, the Warrenton-Fauquier Airport, and
the Department of Parks & Recreation, whether residential,
commercial, or industrial, are covered by the Rule. The
Federal Trade Commission opined that tax accounts are not
covered accounts pursuant to FACT and the Regulations.
Under the Program, creditors
must 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 approved by the governing body.
The attached Fauquier County
Identity Theft Prevention Program has been drafted for the
Board’s consideration. If approved, the Fauquier County
Program would affect the Department of Environmental
Services, Department of Parks & Recreation, and
Warrenton-Fauquier Airport. |