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Identity Theft Red Flags Rules

This page provides an overview of the FTC "red flags rules" intended to prevent identity theft, along with their potential impacts on local governments in Washington State and examples of local identify theft prevention programs.


Overview

The Federal Trade Commission's rules on identity theft, known as "Red Flags Rules," require financial institutions, utilities, and other creditors to set up programs aimed at preventing identity theft. Because of the definition of "creditor" in these rules, municipalities may be affected.

Legal counsels have advised that until the FTC revises its guidance, local governments with municipal utilities should comply with the Identity Theft Prevention Program provisions of the "Red Flag Rules."

The FTC began enforcement of the "Red Flags" rule on January 1, 2011. The Federal Credit Reporting Act was amended by the Red Flag Program Clarification Act of 2010 to clarify the applicability of identity theft guidelines to creditors; however, it did not clearly include or exclude specific types of entities, such as utilities.


Federal Trade Commission Regulations


Advice Given to Local Governments


Examples of Local Identify Theft Prevention Programs


Information from State Associations

  • Red Flag Rule Survey, California Society of Municipal Finance Officers
  • Identity Theft Prevention Program Compliance Model, National Rural Water Association (2008)
  • North Carolina Municipal League Memo, re: Identity Theft Prevention Programs/Red Flag Rules - Important Information on New Federal Requirements for Municipalities, Memo to Managers, Administrators, Clerks, Attorneys, Finance Officers, from Andrew L. Romanet, Jr., General Counsel, and John M. Phelps, II, Senior Assistant General Counsel, 09/04/2008
  • Tennessee Municipal Technical Advisory Service (MTAS) Model Identity Theft Policy and FACTA Compliance (2008), by Josh Jones, MTAS Legal Consultant - Includes model policy and adopting resolution

Articles on Red Flags Rules


Last Modified: December 21, 2017