Section 114 of the Fair and Accurate Credit Transactions Act (FACTA), also known as the Red Flags Ruling, includes provisions to protect consumers' identity by monitoring information held by financial institutions.  There are three principal objectives of the ruling: Prevention, Detection, and Mitigation.

The Red Flag Rules apply to "financial institutions," which include not only banks, securities firms, and insurance companies, but also companies providing many other types of financial products and services to consumers.   The Rules govern the identification and reporting of potential problems to personal accounts held by financial institutions. Financial institutions are forced to ensure that their identity theft protection programs are approved by their Board of Directors, and are based on initiatives that effectively lower the risk of consumer identity theft.  It also applies to companies that extend any type of credit to consumers, whether or not they are financial institutions, who have ongoing accounts with individuals.  The Red Flags Rule requires all financial institutions to design, implement, and maintain a Red Flags program that will effectively protect customers from identity theft.  

Financial institutions must conduct a risk assessment and gap analysis to identify potential red flags in five distinct areas.

Stevens Technologies regards Section 114 of FACTA as an opportunity for organizations to enlist experts to guide them in promoting security in the way they handle the personal information of their clients.  This not only enhances the overall effectiveness of the organization, but it also promotes confidence and trust among an organization's clients.  Aligning practices with Section 114, therefore, is more than just compulsory; it is an important business strategy for any financial institution.

Contact Stevens Technologies today to learn more about the Section 114 compliance services we can offer you.