Magnum’s fraud solutions and professional services are used to combat multiple fraud schemes. Magnum’s solutions can effectively save hundreds of millions of dollars annually for a variety of industries, such as financial services, telecom, collections, insurance and government.
Fraudsters have become more organized and are more sophisticated than ever before. Their rewards are greater while the risks of apprehension are smaller. And due to the fact that fraud can be a significant cost to doing business, directly impacting the bottom line, there is urgency for organizations to implement the most effective tools and best practices to combat fraud.
The November 1, 2008 deadline for full compliance with Red Flag legislation has been pushed back to May 1st of 2009. This doesn’t buy much time! As a part of the Fair and Accurate Credit Transactions (FACT) Act of 2003, all financial institutions and creditors must have an identity theft program in place by May 1st, and “must provide for the identification, detection and response to patterns, practices, or specific activities-known as “red flags” that could indicate identity theft” (ftc.gov). Are you 100% clear on what constitutes a red flag and what products and services are available to you to be in compliance and protect your customers? Magnum can help.
The Bottom Line
Right now, there are over 40 red flag indicators that can be used to detect and prevent consumer identity theft. Under the legislation, all covered or “accounts that are used for personal, family or household purposes and that involve multiple payments or transactions”, (ftc.gov) financial institutions, transaction accounts and creditors are held to the terms of the FACT Act of 2003. All of the Federal Trade Commission’s suggested indicators fall into 5 basic categories:
- Alerts, notifications or warning from a consumer reporting agency;
- Suspicious documents;
- Suspicious personally identifying information, such as suspicious address;
- Unusual use of-or suspicious activity relating to- a covered account;
- Notices from customers, victims of identity theft, law enforcement authorities, or other business about possible identity theft in connection with covered accounts.
A program must be put into that place that monitors, mitigates and rectifies all identify theft situations. All staff must be appropriately trained, and the overall program must be managed by your Board of Directors or Senior Leadership. Although the government has mandated the programs be put into place, it is under the discretion of the creditor to gauge the appropriate size and scope of their Red Flag initiative.
Take Action
In order to protect your customers and your organization, you must take action now. According to Ed Lowery, Assistant Special Agent, U.S. Secret Service, “the real problem behind [identity theft] is the folks who have the technical expertise to mine or steal information in the first place” (Cards & Payments, October 2008, Vol. 21, No. 10). If you equip your business now with reliable Red Flag solutions you can ensure you and your customers are protected.
Magnum has developed a comprehensive approach to the Red Flag initiative. Through our consulting and technology, Magnum can help you:
- Validate your customer identifying information
- Name, Address, DOB, Personal Identification Number (Tax or SS), phone numbers, etc
- Comparison of data to: bureau report, CRM data, public databases
- Compare fraud scores from third party vendors
- Lexis Nexis, Equifax, Experian, ID Analytics, etc…
- Evaluate patterns
- Number of trades over a given time
- Change in industry purchase patterns
- Support a cascading evaluation strategy
- Quick check
- Deeper data analysis
- Challenger questions
In addition, Magnum’s professional services, combined with our stat-of-art workflow management, can help you manage an auditable and sustainable Red Flag process. Through this process management you can enforce policy, and ensure that your business survives the regulatory scrutiny that is sure to occur.
Talk to Magnum today to investigate how we can help you succeed. To learn more about Magnum’s Red Flag solutions, please visit us at www.magnum.net, e-mail us at marketing.info@magnum.net, or call us at 770.952.4940.
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