FACTA Red Flags Rule Regulatory Compliance | Experian (2024)

The Fair and Accurate Credit Transaction Act (FACTA) is an amendment to the Fair Credit Reporting Act (FCRA) and includes the Red Flags Rule, implemented in 2008. The Red Flags Rule calls for financial institutions and creditors to implement red flags to detect and prevent against identity theft. Institutions are required to have a written identity theft prevention program (ITPP) to govern their organization and protect their consumers.

What’s a red flag?

The FTC defines a red flag as a pattern, practice or specific activity that indicates the possible existence of identity theft. FTC guidelines include 26 examples of patterns that should be considered in an identity theft prevention program. These examples fall into the following categories:

• Alerts and notifications from reporting agencies and third parties
• Presentation of suspicious documents or identifying information
• Unusual or suspicious account activity
• Notices from customers, victims or law enforcement agencies

Ensure compliance

With smarter identity theft strategies, you can build a Red Flags Rule program and ensure compliance.

Fraud management

Identify, detect and respond to fraud with a multilayered approach and mitigate risk.

Transaction monitoring

By monitoring account activity, you can better protect your business when suspicious activity arises.

Speed and accuracy

Run red flag checks on individual transactions easily and separate from the credit profile to maximize efficiency while ensuring compliance.