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A program must be designed to detect the red flags you’ve identified.3 For example, if a customer has to provide some form of identification to open an account with your company, an ID that doesn’t look genuine is a “red flag” for your business. Red Flags are suspicious patterns or practices, or specific activities that indicate the possibility of identity theft. A program must include reasonable policies and procedures to identify the red flags of identity theft that may occur in your day-to-day operations.A program must include four basic elements that create a framework to deal with the threat of identity theft. The Red Flags Rule tells you how to develop, implement, and administer an identity theft prevention program. Who Must Comply with the Red Flags Rule.This article has tips for organizations under FTC jurisdiction to determine whether they need to design an identity theft prevention program. The Federal Trade Commission (FTC) enforces the Red Flags Rule with several other agencies. The bottom line is that a program can help businesses spot suspicious patterns and prevent the costly consequences of identity theft. The Red Flags Rule 1 requires many businesses and organizations to implement a written identity theft prevention program designed to detect the “red flags” of identity theft in their day-to-day operations, take steps to prevent the crime, and mitigate its damage. The cost to business - left with unpaid bills racked up by scam artists - can be staggering, too. Identity thieves may drain accounts, damage credit, and even put medical treatment at risk. About the FTC Show/hide About the FTC menu itemsĪn estimated nine million Americans have their identities stolen each year.