Federal Mortgage Law · 24% of the SAFE exammedium
Correct answer: Procedures for identifying, detecting, and responding to red flags, along with a plan to keep the program current with new threats
FACTA's Red Flags Rule requires all financial institutions and creditors to create a written identity theft prevention program that includes four core elements: (1) procedures to identify red flags relevant to the institution's operations, (2) procedures to detect those red flags, (3) procedures to respond appropriately when red flags are detected, and (4) a plan to periodically update the program to address new and evolving threats. "Procedures for identifying, detecting, and respondin..." (criminal background checks) is not a Red Flags Rule requirement. "Procedures for running criminal background checks on..." (quarterly audits of closed files) is not prescribed by the Red Flags Rule. "Mandatory annual credit report pulls on all existing..." (annual credit pulls on existing customers) is not a requirement of the Red Flags Rule and would raise its own privacy concerns.
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