Your dealership must have an identity theft program in place, as a creditor. Your dealership must implement a written identity theft prevention program designed to detect the “red flags” of identity theft in your day-to-day operations, take steps to prevent the crime, and mitigate its damage.
The Red Flags Rule was created by the Federal Trade Commission (FTC) to help prevent identity theft. Mandated by the Fair and Accurate Credit Transaction Act, the Red Flags Rule requires that Financial Institutions and any other company that performs a service, then receives payment once the work is complete (such as finance companies, automobile dealers, mortgage brokers, utility companies, telecommunications companies, medical practices, hospitals, law firms and more) establish a written Identity Theft Prevention Program with an effective mandatory compliance Program. Companies failing to create and maintain a “Good Faith” compliance effort run the risk of fines for each violation of the law and exposure to potentially disastrous public relations. The Red Flags Rule requires that companies:
- Designate a Compliance Officer/Coordinator
- Perform a Risk Assessment
- Draft and Communicate Policy and Procedures
- Conduct Employee Training
- Undertake Periodic Audits
- Obtain Board and/or Executive Management Approval
- Complete Ongoing Annual Reports.
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