Chances are, your business is subject to a new Federal Trade Commission (FTC) rule and you didn't even know it. Back in January 2008, the FTC’s FACTA Red Flags Rule went into effect, requiring financial institutions and so-called "creditors" to develop a written program to prevent, detect and minimize the damage from identity theft.

Almost ANY business could be considered a "creditor."

What many businesses do not realize is that the term "creditor" includes any business that provides its products or services before invoicing clients. This realization resulted in mass confusion regarding which businesses are covered by the Rule, so the FTC extended the compliance deadline several times in order to get the message out.

The current deadline is now set for June 1, 2010. Violation of the Rule can result in a $3,500 maximum civil penalty per violation. Each instance in which the company has violated the Rule is a separate violation.

Defining who is subject to this new regulation can be confusing. For example, you may be considered a "creditor," but your customer accounts may not be covered by the rule. And accepting credit cards as a form of payment does not, by itself, make you a creditor.

To help clear things up, the FTC has developed a Red Flags website (www.ftc.gov/redflagsrule) with information that can help determine if your business is covered and how to comply with the Rule. It includes an online compliance template to design an Identity Theft Prevention Program, as well as articles directed to specific businesses and industries, guidance manuals and frequently asked questions. The video below also offers a quick summary of the Rule.

Although the Red Flags Rule does not specifically mention asset retirement in its examples, it does require businesses to develop a program to " prevent, detect, and minimize the damage from identity theft." As many businesses have discovered, the proper removal of client records on old hard drives should definitely be a part of any Identity Theft Prevention Program.

PC Disposal’s Secure and Secure Plus™ Risk Management Disposal services can help you meet the requirements for the FTC's Red Flags Rule. All sensitive data is completely destroyed or removed using the same method recommended by the Department of Defense – a promise we back up with our $1,000,000 service guarantee. You can feel confident making PC Disposal’s services a part of your Identity Theft Prevention Program.

Please contact us if you have any questions.