The Red Flags Rule is the core piece of the ITPP program.
What it means and how it pertains to a vehicle sale or lease is simple. Your Red Flags program should include policies and procedures for detecting, preventing, and mitigating identity theft and identify potential “Red Flags” signaling the possibility of identity theft. The entire rule is extensive and covers many industries in the U.S.
The Red Flags Rule went into effect November 1, 2008 but was suspended · through May 1, 2009 to allow creditors to correctly implement the program.
Enforcement began January 1, 2011. If you do not have a program in place already don’t wait any longer!
While you may already have systems in place to verify the identity of your dealership’s finance and lease customers, it is your responsibility to ensure your current systems are in compliance with the new, more elaborate requirements.Congress has taken a tougher stand against identity theft by requiring auto dealers to develop and implement a written identity theft prevention program.
At this time it is mandatory to perform Red Flags on everyone you pull a credit report on.